When many people picture fraud, they envision high-profile cases involving the embezzlement of millions of dollars. But small quantities of money can add up, and "The Business Review" estimates, based on several studies, that employees steal as much as $400 million per week from their employers. This undetected fraud can have disastrous and far-reaching consequences for an organization, and a fraud-detection strategy can help you keep your business safe.

Financial Losses

The most obvious consequence of undetected fraud is a financial loss. Corporate books might not balance correctly as a result of this financial loss. Sometimes fraudsters will fraudulently alter the books, making it difficult for company managers to detect this discrepancy. This, in turn, can lead to significant financial problems as the financial losses add up. In serious cases, a company can just run out of money, but in less-severe cases, credit cards might be declined or payment might be made late because employees are pocketing the money instead.

Lost Inventory

Whether you work in the service industry or run a retail store, lost tangible goods can be a huge problem. Some employees commit fraud by lifting merchandise and re-selling it or by faking burglaries. An office employee, for example, might steal the copier himself to resell it and then pretend the office was burglarized. This loss in tangible goods can cost a company quite a bit of money, and the investigations to uncover the cause can be equally expensive.

Lost Productivity

When employees are spending their time figuring out ways to steal, they're not being productive on the job. If other employees are aware of or suspect the fraud, they might work less hard. Fraud can also affect productivity in indirect ways. If there's money missing, the time spent trying to figure out why is time wasted that could be better spent on growing the company, reaching out to customers or acquiring new inventory.

Employees don't just steal from their employers; they might also commit fraud against customers or businesses with whom you do business by stealing credit card numbers or identities. This can put your company at risk for lawsuits, particularly if the victim argues that the employees were not closely supervised or that the company allowed them to steal. Further, when employees are caught in fraud schemes, companies can get involved with the legal cases, be forced to testify and receive lots of negative press coverage.