The 2011 embezzlement stats are out. This is a list you don’t want to be on! It means that you, your business and/or your state is more at risk for employee theft.
When you consider all of the challenges with running a business today, what with state and federal tax complexities and increases, global competition and reduced demand, it is horrible to think that you could lose everything because you hired someone who stole from you.
And make no mistake, as much as someone may try to minimize the crime by calling it “white collar”, embezzlement is stealing. And it’s stealing from you.
Small business owners are most likely to suffer a loss because of their bookkeeper. In fact, a small business owner is more at risk than a big business owner. That’s because a small business typically only needs one person in the internal bookkeeping office. So there is no separation of duties. One person does it all, and controls it all. And unless you, the owner, are trained in spotting irregularities or have expensive outside reviews or audits performed every year, you’re likely going to miss the problem.
At the end of this article, I’m going to share with you two recommendations for protecting your small business from a bookkeeper embezzlement.
I have one warning, though. Please don’t think it can’t happen to you. It can happen to you. I’ve had to have the “your staff is stealing from you” conversation way too many times lately. No owner wants to hear. I’m sure you don’t want to hear it either.
Most embezzlers state that gambling was the motivating factor. And, surprisingly, almost 2/3s of the embezzlers were women. But the guys who embezzle take 25% more. By far the most common scheme was forging check signatures or issuing checks to nonexistent companies. Over ¾ of the incidents were done by the bookkeeper. And the schemes usually lasted for at least 5 years.
#1: If you’re not big enough to have at least two people in your bookkeeping department, then hire an outside bookkeeper. The outside bookkeeper needs to be completely separate from your ongoing business, or you run the same risks.
#2: Analyze your financial statements each and every month to note where costs appear out of line. This will spot areas you need to watch as well as look for items that might be seeing fraud.
At Cash Flow Accounting, we have solutions to help you keep more of your hard-earned money. Our virtual bookkeeping services provide that extra step of protection and expertise at an incredibly affordable price. Plus, our virtual CFO analysis can help you narrow in on what you need to do to help your business really grow.
Drop Richard an email at Richard at USTaxAid.com or give him a call at 888-592-4769 to find out more about our bookkeeping and CFO solutions.