Have You Assessed the Risk of Fraud in Your Company?
Small businesses are particularly susceptible to fraud as these companies have fewer resources and less segregation of duties. Many business owners...
1 min read
Statistics show that well over half of small business employees have stolen from their employer at least once. Often, owners particularly trust one employee and put them in charge of doing payroll, paying bills, and making deposits. Even though most employers know it’s not a good idea to trust one employee with the entire financial function of business, it does happen-quite frequently. As happens in so many cases, temptation proves too much for the employee. Employers become suspicious, but by the time they consult with their tax professionals the employee has managed to steal from the company. And the business may not survive.
Most people tend to think that “it can’t happen to me”. How could an employee, a person whom the employer considered to be a close friend steal from them? The answer is: the business owner made it easy. By fully trusting employees, owners can do very little oversight of the financial operations of their business. Owners can also believe they are saving money by not having outside accountants involved on a regular basis.
Even though there is no foolproof way to safeguard against all employee theft, there are several things that business owners can do to prevent a great deal of it. The first and most important is to be involved. Make sure you are looking over the bank accounts and checkbooks on a regular basis. With the technology available these days, small business owners have a lot of great programs available to help them in this process. An employee may scan in invoices to be paid, but instead of the employee also writing a check to pay the bill, the business owner can approve the bill and pay it electronically. This limits an employee’s access to the company checking account, which greatly decreases the risk of employee theft.
Online accounting programs and online banking can also help a small business owners manage the company finances and reduce exposure to employee theft. Business owners can get “real time” information that allows him/her to see exactly what is happening with the company’s books.
Baldwin CPAs is happy to assist small business owners with evaluating and implementing ways to help their company manage their financial functions-and make life easier for the business owner. Contact us today at 1-866-287-9604
for more information.
/posted by Janet Jackson Hill, CPA