Wednesday, March 2, 2016

Can I protect my business from embezzlement?

According to The Association of Certified Fraud Examiners, internal fraud costs companies 5% of revenue each year—that’s a lot if you’re a small business. Unfortunately, studies also show 87% of employees who steal are first-time offenders. Most of the fraud occurs with employees working in finance, bookkeeping or accounting departments, but it’s a good idea to put some checks in place for all employees, no matter their position.
  • Have clear procedures and policies when it comes to handling money. Limit who has access to bank accounts and checks and if your business uses cash registers, have employees use a password-protected system so you know who was using the technology every minute of the day.
  • Don’t let any one employee work completely alone and have sole responsibility for handling funds. Cross-train employees so you know more than one person can tell what another employee is doing.
  • Don’t just hand over “the books” to an employee and forget about it. Make sure you look over the bookkeeping at random times. Your bookkeeper should know he or she could be held accountable at any time.
  • Ask your IT person about ways to get warnings of potential fraud before it happens. For example, can you get alerts when employees access files that have nothing to do with their jobs? Make it a company policy that employees shouldn’t use unapproved programs or apps.
  • If you let your employees work from home or if they are mobile, you can have your IT person set up monitoring tools on any device used for business.
  • Hire an outside auditor to periodically go over your accounts and make sure everything is in order.

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