Just this week, there was a story in the news of a small not-for-profit company dealing with fraud from a bookkeeper/bookkeeping service. It happens too many times and can occur with the most reliable employees. Often times the business owner is heard saying that the employee was long term, loyal, and trusted.
How does this happen?
Rarely does the fraud occur in one lump million-dollar heist. No, it occurs over time, months, and even years. It typically happens when your bookkeeper/finance manager is performing all accounting functions including payment approval, writing/signing checks and performing the bank reconciliation. The most common situations are:
What can I do to prevent it?
Separating accounting duties is a critical step in avoiding fraud all businesses. A business should never have one person (other than the owner) writing checks, paying bills, and reconciling the bank account. Period. Technology can assist with the separation of duties. Apps like Expex create stopgaps and tools to mitigate the possibility of financial fraud by:
Fraud doesn’t always happen.
True, it does not always happen but why put yourself in those shoes? Ask us how we can help you and your business stay healthy, happy, and growing!