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Critical Financial Controls to Avoid Bookkeeping Theft in Your Business

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Critical Financial Controls to Avoid Bookkeeping Theft in Your Business

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BryceLedetforWebI recently read an article about a woman arrested for stealing over $200,000 from her employer over the course of a year. These kinds of articles are all too common As many small businesses employ an internal bookkeeping staff comprised of one person, it is quite common for the business owner to place 100% trust in that individual, and throws oversight to the wind.

Most likely your bookkeeping services, as well all of your business’ operations, are executed by trustworthy and reliable individuals who you are happy and privileged to have on your team. But when it comes to running a business, it is critical that proper checks and balances are put in place, and that you, as the business owner, have an oversight role in the accounting process. Not doing this could cost your business substantially, as you can see in the article referenced above.

If you have provided your bookkeeper or office manager a signature stamp to use for signing checks on your behalf, throw it in the trash barrel! Ensure at a minimum that you, or an individual other than your bookkeeper, like your CFO or COO, reviews and signs all checks presented for signature. The same goes for the use of online bill payment. Do not, I repeat, do not, give your bookkeeper access to pay your bills online through your bank's website. If you want to pay your bills online, set up Bill.com so that your bookkeeper can set-up the bills for you to release payment on. Ensure that your bookkeeper does not have direct authority to directly spend your money, period.

Other controls you can put in place include comparing your sales reports against your cash deposits to ensure all cash is accounted for, and reviewing your bank statement for questionable or unauthorized transactions on a monthly basis.

Above all though, it’s no use checking in with your numbers if you don’t check in with your team as well. Ensure your internal bookkeeper or bookkeeping services provider understands the processes put in place and that you regularly check in on the numbers. A combination of financial controls and a team approach to your business's accounting department will not only sniff out any wrongdoing, but will also keep you tuned into your business’ financial life and promote a culture of accountability and transparency.

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Bryce Ledet

Author:

Bryce Ledet

Bryce Ledet is the managing director at Supporting Strategies | New Orleans.

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This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.