4 Loss Control Options for Your Company
All businesses are susceptible to theft
In a competitive marketplace, businesses face enough challenges when it comes to making a profit. Unnecessary loss doesn’t need to be one of those challenges.
As a result, loss control is indispensable. It’s a proactive means to minimize, if not prevent, loss in any form (including waste or theft). This is because losses are basically an expense item. Businesses lose money when they lose inventory or equipment.
Fortunately, there are loss control options available to businesses. Here are 4 of them.
1. Inventory Management
It’s safe to say that the single most important loss control initiative that can be taken by any business that maintains an inventory is inventory management. Because inventory management can become a complicated science very quickly, there are numerous software applications available to help you, the small-to-medium sized business owner, properly handle your backroom stock.
Unmanaged inventory is susceptible to waste and theft. Waste may happen only occasionally, but if people who have access to your inventory know that you’re not keeping tabs on stock levels, they’ll be tempted to help themselves.
Of course, calculating costs of goods sold requires, to some extent, a level of inventory management. That’s because costs of goods sold is calculated based on the difference between beginning and ending inventory values.
2. Data Security
You’re going to need state-of-the-art data security. There are simply too many people in this world who are skilled in the science of hacking for you to leave the security of your systems to chance.
You’ll find that data security is especially important if you keep a record of people’s credit card numbers on a hard drive. Nothing will ruin the reputation of your business faster than news about your customers’ credit card numbers being stolen because your systems were hacked.
Also, along these lines, ensure that your hardware is kept in a secure physical location. Sometimes, hackers gain access to systems the old-fashioned way: they break in to your location and use them.
Does your business have a solid data security plan?
3. Business Insurance
You can follow all of the points laid out in this article and, unfortunately, still be the victim of some type of loss. In that case, you’re going to need good insurance.
How does business insurance effectively prevent loss? Because it shifts the risk from you, the business owner, to a third party, in this case the insurance company. In the event that you do everything “right” and you are still the victim of some unfortunate occurrence that led to loss, you have some recourse with your insurance company.
This is where you want to do some number crunching. What’s a reasonable amount of loss you can expect? For example, if you own a restaurant, what’s the average value of the food stock in your walk-in? You might need to replace it all if there is a lengthy power outage in your area. Make sure you get a policy that covers that amount.
Yes, educate your employees about loss control and prevention as well. There are two very good reasons to do this. First, you’re letting your team members know that you take loss control seriously. This will act as an inherent deterrent to theft. Second, you’ll have some help in your loss control efforts. That’s a good thing since, for most businesses, it’s challenging for one person to handle the task alone.
Loss Prevention might seem like a heavy burden for a business at first because it involves a lot of number-crunching and hands-on effort. However, in the long, a good loss control policy more than pays for itself with the amount of money saved.