Cash schemes involve the intentional misappropriation of an organization’s physical currency and are categorized based on when the theft occurs relative to its accounting entry. Skimming is an unrecorded cash scheme where an employee intercepts currency before it is entered into the financial ledgers, making the theft difficult to identify through standard balance sheet audits.

Skimming (Off-Book Interception) vs. Larceny (On-Book Embezzlement) = Distinct Control Gaps

Ledger Shortfall Variance = Total Recorded Cash Receipts - Verified Physical Bank Deposit Logs

Skimming occurs at the point of sale when an operator accepts cash from a client but fails to enter the transaction into the register, pocketing the currency directly. To mitigate this risk, firms deploy physical surveillance, perform automated product inventory counts, and encourage client tracking through prominent signage (e.g., “If you do not receive a printed receipt, your order is free”).

Cash larceny involves the theft of cash after it has been logged in the organization’s accounting systems. Perpetrators often use register manipulations, entering fake refunds, voids, or product return entries to cover cash shortfalls.

Anti-fraud teams identify larceny by executing daily automated reconciliations. They cross-check registered transaction volumes directly against data feeds from the Federal Reserve E-Payments Gateway, helping to spot anomalies before funds can be moved or hidden.