'Inventory fraud involves the theft of physical inventory items and the misstatement of inventory records on a company's financial statements,' says Chron.com.
The good news is 'timely fraud detection and prevention can save your business time and money,' adds the website.
Lookout for these four fraud indicators when doing inventory
Indicator #1: No segregation of duties between:
Indicator #2: Writing off stock without supporting documents.
The Labour Law for Managers Loose Leaf Service recommends you make sure your employees always file the purchase order; goods received note and invoice together.
Indicator #3: Unusual volume of adjustments and write-offs.
Indicator #4: No policy for identifying, selling and disposing of obsolete or surplus material.
As an employer, 'you need to be aware that your business can be targeted for fraud by con artists or worse one of your employees. And the scary part is this fraud could be disguised in such a sophisticated manner that you won't even recognise it,' warns FSP Business.
In addition to looking out for these fraud indicators, FSP Business recommends you use this seven step fraud prevention model to curb fraud in your company.