Hiring a new employee in the finance department at your small-to-medium business?
Remember to do a credit check, and you’ll be taking one more step to protect your company from fraud.
We have experienced situations where people who behave honestly in most situations can be tempted to or have committed fraud when their personal financial situations were distressed. A credit check, especially for positions that have access to company funds, can give your company insight into the ability of your prospective employees to manage their own finances. The personal financial history you’ll see on a credit check also can be an indicator of the type of attitude and performance you can expect from an employee dealing with company-related financial transactions.
A quick review of a current or prospective employee’s credit history can provide valuable insight for mitigating your company risk and liability. So we suggest that you proceed cautiously with any prospective candidate who, despite being a potentially great fit for the position, has personal credit challenges. Be sure to perform the due diligence necessary to understand their situation and motivations -- especially if you have a smaller business where there is less oversight and operational redundancy for detecting and preventing fraud.
Running credit checks on prospective or current employees makes good business sense -- so make sure to formalize this process and include it as part of your internal controls framework.
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