Methods of finding and preventing fraud

Unfortunately, dishonest employees can be found in any type of business. In retail, employees looking for personal gain may devise new fraud schemes that typically exploit the vulnerabilities of the business owner — lack of control, inattention, or overload.

Types of Employee Fraud

• Financial fraud by staff directly handling cash.
• Exploitation of discount programs and customer loyalty systems.
• Theft and substitution of goods by warehouse staff or salespeople.
• Theft and leakage of information — transferring data about customers, suppliers, or business status to competitors, or using it for personal purposes.

10 Control Tools: Rules and Recommendations for Working with Torgsoft

Automation greatly simplifies employee monitoring, but it cannot yet inform the business owner of employee misconduct on its own. The program is a tool that provides information for analysis and management decisions.
 
To monitor the situation and detect employee misconduct in time, it is important to know the basic rules for working with Torgsoft:

Role Restrictions

Role settings are designed to control user actions and protect information access in Torgsoft. Each user can have their role customized to provide access only to specific forms, modes, tables, columns, or actions.
 
However, even in such conditions, some employees may look for ways to bypass the system, so the program includes restrictive settings and logs user actions.

Each User — Their Own Role

Each employee should only have access to the actions they regularly perform. Follow the rule: deny everything, allow only necessary functions based on the position.

Each Employee — Their Own Torgsoft User Account

The username should be clearly identifiable, such as Mila or Novikova, but not test, test1, or user2. This makes it easier to analyze user actions and correlate them with the employee.
 
If multiple employees work on the same computer simultaneously, enable mandatory seller registration: scan the seller's badge with each transaction or run two instances of Torgsoft for each seller separately. Information on who created or modified documents is recorded in Torgsoft.

Spot Checks by the Manager

The business owner should understand the business processes their employees are involved in. If the owner knows what actions the seller performs in the program and why, they can spot deviations from the usual work scheme.

User Action Log Monitoring

The user action log shows information in chronological order: what the user did with warehouse documents, which forms they opened, edited, or deleted.
 
If an employee's actions deviate from the main business process, it’s worth investigating — are they intentional actions, or does the employee simply not understand how to use the accounting program properly?
In the user action log, pay attention to warnings that the user tried to open forms restricted for them. If these warnings appear frequently, there is a possibility the employee is attempting to access restricted information.

Product Movement

This form contains data on all product movement documents, including the date and time each document was created. If there is suspicion that documents were backdated, check the Product Movement form.

Document Change Log

Regularly checking this log isn’t necessary as it records every document change and contains a lot of routine information. However, if there is a warehouse document with incorrect information or suspicions that the data was "illegally" edited, the document change log will provide complete information on who did what and when.

Settings Change Log

This log contains information about changes to critical program settings. In disputed situations, it allows you to determine exactly who changed the settings and what the values were before the change. Some settings can drastically alter calculation algorithms and program behavior, so changing them may result in important information being lost.

Financial Document

All cash flow activities are recorded in the financial document. Each document has a serial number, regardless of the creation date. If an employee has permission to conduct backdated financial operations, but the work policy prohibits such actions, you can sort the financial document by document number and immediately see who created documents with backdated entries. Backdating is a way to hide expenses or discreetly withdraw cash if the employee has real access to finances, such as settling payments with service providers or business support services.

Indirect Monitoring

There are modes that can serve as indicators of employee disloyalty. One such mode is "Work Time Registration." If an employee frequently arrives late without reason or unjustifiably stays after hours — this is a reason to pay close attention to them. This behavior indicates that the employee may not be loyal to company rules.
Periodically check write-off, return, and defect accounting documents: if the employee has the right to write off goods, a shortage can be concealed through write-offs.

What to Do if You Discover Employee Misconduct?

What if there are suspicious actions in the program or clear indications of fraud?
 
1. Verify user role settings against their job duties. It often happens that during the initial role configuration, it isn’t always clear what should be allowed for each role and which forms should be accessible. This can lead to situations where employees have access to "extra" information.
 
2. Check the program settings. The owner may believe the program strictly prohibits, for example, negative balance sales, but in fact, the setting is only a warning for the seller. If the system behaves unusually, first check how it is configured.
 
3. Ask the employee about their workflow. If work issues appear only with one user and there are problems with routine tasks, it is likely due to incorrect user actions.
Monitor their actions step by step. If the employee follows the correct procedure and the "program behaves incorrectly" (in a way that benefits the seller), it’s worth investigating this issue in-depth, as such behavior could indicate fraud.
 
4. Add restrictions. Entrepreneurs, especially at the beginning of their business, often place too much trust in employees and do not limit their roles. All restriction settings in Torgsoft are based on hard lessons learned by entrepreneurs and are intended not to complicate the system but to protect the business from losses. For cashiers, prohibitions on deleting items from sales without entering a reason, prohibiting manual discount card entry, restricting cash drawer balance viewing, and automatic receipt printing are recommended default restrictions.
 
5. Eliminate chaos in business processes. If employees are allowed to deviate from the strict workflow algorithm and, for example, enter data into the system out of sequence — this can lead to fraud or loss of information. Timely document management and closure is the foundation of safe accounting.
 
6. Automate what is still manual. Some employees tend to work out of habit and perform manually what Torgsoft automates. This should be stopped.
Is the seller manually entering discounts? Prohibit manual entry and create promo codes or discount cards for fixed discounts. Are they manually entering weight into the program or entering an amount in the bank terminal? — This can lead to losses from inattention or haste.
 
7. Don’t jump to conclusions. If the owner cannot find guaranteed confirmation of an employee’s misconduct, it is best to contact Torgsoft’s support service — support staff know the internal program algorithms and, with the cooperation of the business owner, can help thoroughly understand cause-and-effect relationships.