The Expert Podcast

How bad can the effects of embezzlement get? Well, here's a perfect example. A midsize company in Central Oregon, in the Willamette Valley, had a decent-sized newspaper. An employee embezzled money, and that theft resulted in this company going out of business. They had to lay off their entire staff and stop printing their newspaper after the embezzlement happened.

How can that be? You don’t have to steal all the money from a company to put them out of business. Most companies have a profit margin that’s between 15% and maybe 25%. Some companies with high margins are at 30%, while low-margin companies like restaurants, grocery stores, and dealerships may have only 10%.

Let’s say you’re a 15% profit margin company. That means all the money you take in leaves you with only 15% after paying all your bills, expenses, rent, payroll, and insurance. If someone steals 20% of your money, you’re out of business. You don’t have the money to keep the business going.

It doesn’t take much. Many times, the scammer doesn’t realize the full impact—they’re just stealing as much as they can. But they steal enough to put the company out of business.

If you are any size company—small, medium, or large—make sure you’re performing good due diligence and have best practices in place. You can read about it on our website. And if you suspect fraud or embezzlement happening in your company, conduct an investigation to get to the bottom of it. Ensuring your suspicions aren’t true could save your company’s future.