The financial records of any company is private and contains privileged information, which is why most often than not, the ones with access to the data and the company money are members of the inner circle, deemed to be trustworthy by the business owner. Unfortunately, it is also these trusted individuals who end up embezzling from the business; in the end, the truth is you cannot trust anyone but yourself in business. So what can you do to prevent being embezzled or from being a victim of bookkeeping fraud?
- Don’t Designate One Money Guy– Most small and mid- size businesses have one person through whom all the money flows and no one questions him. Unfortunately, this person is the one most likely to embezzle, simply because he can with all the money he has access to. Most business owners don’t cross check the records submitted and even if they do, chances are less that they will never find anything because the money guy covered his tracks carefully. So it is wise to designate at least two employees to manage money. You can also consider virtual bookkeeping services to make your life easier and prevent bookkeeping fraud.
- Get Rid of Cash Payments– Cash payments are a common method of bookkeeping fraud. Excess cash is withdrawn and the remainder is never paid back; this goes unnoticed for long periods of time. Fortunately you no longer have to depend on cash payments; major businesses have automatic clearing house payments and accept online payments.
- Review Reports Regularly– Reports have to be reviewed regularly so that you can detect any false entries and prevent bookkeeping fraud. Make sure you have controls in place so that nothing goes undetected. Putting controls in place and following through them can take up a lot of your time and resources, but if you want to keep your business safe, you have to take the necessary precautions. If all that seems too much, you can always invest in virtual bookkeeping services which will keep your books up-to-date and accurate, while also saving you time and energy.