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How to Prevent Fraud
Submitted by Waypoint Accounting on Mon, 08/01/2011 - 19:56
You may have read these recent local headlines (click link to read article):
- Two charged in Windham embezzlement cases
- Ex-Stow selectman pleads guilty in embezzlement case
- Ex-Revere library chief indicted on embezzling charges
- Former Murray's Toggery bookkeeper pleads guilty to embezzlement charge
Ugly as these story topics may be, they paint an accurate picture of what a lot of businesses face these days when employees or non-CPA bookkeepers steal funds.
While nobody can completely protect themselves from fraud, take a look at these general tips you can follow to reduce the risk of becoming a victim:
- Segregate duties. Don't have the same person handle the incoming mail, deposits, checkbook balancing, and invoicing. If necessary, outsource payroll, tax preparation, bookkeeping, and accounts payable - but make sure you do due diligence on the bookkeeping company you work with.
- Review reports daily. Look carefully at cash receipts, credit card payments, and checks. Thoroughly look over all bank statements.
- Watch your overhead. Learn to read your financial statements. Be on the lookout for double payment of supplies, or the creation of dummy vendors. Run periodic credit checks on yourself and watch open lines of credit.
- Have your company's financial records audited regularly (usually quarterly). In addition to scheduled audits, conduct random audits occasionally so anyone stealing doesn't have time to cover up their tracks.
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