Employee Theft
In most cases employee theft is more an irritant than a make or break issue. One charge customer with a large credit balance going bankrupt causes you more financial loss than a life time of petty theft from an employee. However, in most businesses employee theft causes more financial loss than customer theft. Be aware that there are actions that encourage employee theft.
* A simple rule is that a good owner does not steal from his employees nor anybody else. If employees are part of a profit sharing program and they see the boss stealing from the company, that even gives an honest employee an incentive to steal. A boss that steals from anybody creates an atmosphere of dishonesty.
* The boss should make it clear that managers and employees are trusted equally. If you as a boss make it clear that you trust a manager more than employees, then your employees are hesitant to turn in a manager who is stealing. Moreover, a manager is usually in a better position to steal more than any other employee. I remember a situation when an employee went to the owner concerning a manager that was stealing. The first thing out of the owner's mouth was to fire the employee. However, the owner changed his mind when it was clear that the employee was correct.
There are two different ways for you to fight employee theft using your Store POS System. For the first way you lock your system so that nobody except you can change any data inside your system. If you lock your system, then you have to make any corrections to your system that occur from sales clerks making simple mistakes during normal operations. My preference is second way which is to play dumb and open the system so that anybody can make changes to the computer data but at the same time all changes to data are tracked. However, this way requires that you monitor changes in data regularly to look for patterns that would indicate theft.
Labels: employee theft, Store POS System, tracking changes in Store POS System data
Getting The Attention of a Sales Tax Auditor
It varies from state to state and probably from auditor to auditor but there are certain things that are bound to get the attention of sales tax auditors. A tax exempt charge account that has a large volume of cash sales is one of those things that gets the attention of sales tax auditors. The reason is simple. Suppose a friend of one of your sales clerks comes into your store looking for a good deal. The sales clerk figures that he can run a cash sale through a tax exempt account and give his friend a lower price with no harm done. If it happens just a few times, then probably nothing will come of it. However, things like that don't just happen a few times. If there is a continuing pattern of cash nontaxable sales to a charge account, this begs to be investigated if you get a sales tax audit. If you are audited and found to have not paid some sales tax, then you will have to pay the sales tax plus interest and penalties. The interest and penalties can be more than the tax. A tax audit can come from multiple directions. I will mention a couple that I have heard of in the past. For example, suppose Joe's Repair Shop buys about $1000 a month in charge sales and your sales clerks are running another $1000 a month in cash nontaxable sales through Joe's account. If Joe is audited and they look at his part sales, then they are going to know something is wrong when his sales are about half of what they would expect from his purchases. Also, an audit is likely to come from a former employee looking for a whistle blower's fee. I remember a customer of ours telling me about one of his employees that had formerly worked for a mass retailer. The employee knew that the mass retailer was cheating big time on their taxes. Our customer and his employee went to the IRS and reported the tax cheat. The two of them split a very large whistle blower's fee.
The bottom line is watch cash nontaxable sales to a charge account on your Store POS System to be sure that these sales are actually for the account in question.
Labels: cash nontaxable sales, Sales tax audit, Store POS System
