For some rogue staffers, lifting office supplies or seeking reimbursement on a few minor “non-business related” charges is mere child’s play.

Here are seven of the most over-the-top examples that we could find of in-house theft and employee fraud:

• $1.2 million in false expenses. David Smith, a former Quest Diagnostics manager, managed to get reimbursed for over $1.2 million in false expenses through a complex web of deception. He set up fake companies, created fake invoices and turned in fake expense reports for payments he’d supposedly made to companies on Quest’s behalf. The FBI eventually caught on, and Smith was sentenced to five years in prison. His undoing? In addition to poorly named fake companies like Environmental Tech and Rep Med Services, Smith’s mailing addresses didn’t match up. Example: Environmental Tech’s address was an entrance ramp to a Tampa freeway.
• Security expert finds — and exploits — $1 million hole in company’s internal controls. It’s not an unheard of scenario: A company hires a former “professional” thief as a theft-prevention specialist because of real-life expertise in the security field. In this case, a former embezzler, Barry Webne, was hired at Block Communications, Inc., as a “theft-prevention specialist.” Rather than protection, Webne ended up writing himself checks on company stock — signed with a signature stamp of a co-worker — cashing the checks, then destroying the canceled checks that were returned to the company. He made false entries in the company’s books to cover his actions. Before he was caught, Webne robbed Block of a staggering $1,138,334!
• A suspiciously long case of jury duty. Joseph Winstead, a Washington, D.C., postal worker, managed to bilk the USPS out of close to $40,000 in unearned wages over a total of 144 days by claiming he was serving jury duty on an extended federal trial. (The USPS worker fabricated court paperwork to support his reimbursement because he was excused before the deliberations began.)
  He would’ve gotten away with it if he didn’t try his luck again — three years later. After a supervisor caught on, Winstead plead guilty to fraud — in the same federal courthouse where he claimed to have spent over 100 days fulfilling his civic duties.
• Lots of company property goes missing. The proper safeguards are essential to ensure staffers don’t make off with valuable company property such as PCs, laptops, fax machines and … phone books? Instead of delivering phone books, a former Directory Plus employee squirreled away over 100,000 directories over the course of four years. What did she do with all those numbers? She hid her stash in three storage units — taken out in her name. Estimated losses from the missing phone books: Over $500k!
• Who counts coins anyway? A former Calgary Transit employee, David Hamilton, pilfered almost $375,000 from his company the old-fashioned way. Over the course of seven years, the former fare counter took coins home with him by hiding them in his bag. That’s an average of $200 per day in quarters, dimes and nickels!
• IKEA worker nets $400K in refunds. After mastering the furniture company’s phone and mail-order system, Suraj Samaroo started issuing himself refunds for purchases made by customers. Samaroo would cover up his rampant refunding by altering inventory records. In less than a year, he stole almost $400,000.
• Bookkeeper swipes $350K from bookstore. At an independent bookstore in NC, Bookkeeper Anna Susan Kosak was nabbed for embezzling $348,975. Because Ms. Kosak was the only person to handle the company books, she would write — and cash — checks written out to herself without any oversight.

Of course, employee fraud is no laughing matter. And during times of economic uncertainty, employee theft tends to increase — especially for smaller businesses. Here are four safeguards to keep your company safe.

Like a see-saw, as the economy plunges downward, employee fraud skyrockets — especially in small, private firms. The reasons for employee fraud are many and varied, but there are certain safeguards that can help keep your company safe:

1. Double-check finances. Even if you have a trusted accountant, it doesn’t hurt to take another look yourself. From bank statements to signed checks, making sure nothing is amiss can help save a lot of anguish down the road.
2. Beef-up security. People steal less when they feel as though others are watching. Installing security cameras around cash-heavy areas in the office is a great way to keep employee theft down.
3. Random audits. Enlisting an outside accountant to come in and periodically perform surprise audits of your books will decrease the chance fraudulent employees have to cover up their tracks.
4. Get staffers involved. Often, employees have a good notion when something is going on in the office but keep silent for fear of retaliation. The more comfortable and safe staffers feel about the reporting process, the more likely they’ll be to help out. One option: Create a system (hot line, e-mail program, etc.) where employees can report suspicious activity anonymously.

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With all Finance has to get done in a given day sometimes it’s hard to find the time to step back and track how efficient and effectively your department is running. Finance deals in numbers all day. But how often are you generating numbers to find out how efficient your finance team is?

But benchmarking is more critical than ever. By monitoring your functions’ performance you can determine where you can streamline, boost efficiency (and possibly cash flow) and incentivize staffers to do an even better job.

So what are the best metrics out there? Here are a few to get you started. How many of them are you currently using … and how many more could you be?

Accounts Payable

• Cost per invoice (Total department spend [including allocated overhead] divided by the number of invoices processed)
• Time to process invoices (Average time from when an invoice is received to when it’s ready for payment). Note: Don’t factor in actual payment time, since you probably do some strategic payment timing.
• Percent of invoices paid within terms
• Early pay discounts (percentage of invoices you can pay without paying the total invoice amount)
• Percent of duplicate or erroneous payments
• Days payable outstanding (accounts payable divided by cost of sales) * Days)

Accounts Receivable

• Days sales outstanding (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed)
• Best possible DSO (Best Possible DSO = Current Receivables/Total Credit Sales X Number of Days)
• Collections Effectiveness Index
  Beginning receivables + Monthly credit sales – Ending total receivables  x 100
  Beginning receivables + Monthly credit sales – Ending current receivables
• Average days delinquent (average number of days invoices go past due)

Payroll

• Cost per payroll payment
• Error rates
• Number of manual checks cut
• Days to process new hires
• Cost per payroll inquiry
• Days to resolve payroll inquiries (Note: You could also use this in A/P with days to resolve vendor inquiries and in A/R for customer questions.)

Whether you’re currently using a handful or the whole lot of these metrics, one thing’s a must: Let your staffers know what you’re using to track the department as well as their individual progress.

The last thing you want is for people to think you’re trying to “catch them” doing something wrong in their jobs. Better to position metrics as a way to raise the bar and a springboard to figure out what needs to most attention.

Please share any additional metrics you are using today!