Small businesses face big risks from employee fraud. They often lack the resources or know-how to implement extensive fraud-prevention safeguards. The result can be devastating—in a recent study, the median loss among victimized small companies was $147,000.

To reduce the odds of fraud…

Set up a fraud tip box or hotline. Most fraud isn’t uncovered by fancy accounting techniques—it’s uncovered because one employee becomes suspicious of another and tips off the boss.

Segregate financial responsibilities. The employee who sends out your company’s bills should not be the one who receives its incoming payments. The bookkeeping and the actual handling of cash should be segregated.

Insist that employees take vacations. The dedicated employee who never takes a day off actually might be a thieving employee unwilling to leave his post for fear that his fill-in will uncover his crimes.

Add fraud coverage to your business insurance. Most small-business insurance policies do not cover losses due to employee theft—but it usually is possible to add a fraud endorsement for as little as $500 or so a year for up to $500,000 in coverage.

Have your bank and credit card statements sent to a post office box or your home address. This prevents a dishonest employee from hiding these statements before you can see them. Or you could monitor these statements online.

Conduct background checks on potential employees. For less than $50, you can find out if an applicant has a criminal history. Type “background check” into a search engine to locate companies that perform these ­searches.

Secure sensitive documents. Blank checks and documents containing account numbers or Social Security numbers should be locked up.

Tag and secure valuable business equipment. Any portable, valuable business equipment in your office should be locked up when not in use. Pay a service to etch ID numbers into each piece of business equipment so that you easily can determine which item is missing if one disappears.

Take an actual physical inventory at least once a year. Some companies track inventory only digitally-they never confirm that the things their computer says they have really are on warehouse or store shelves. That makes it very easy for employees to get away with theft.