How To Protect Yourself From Bookkeeper Fraud
Posted on April 14, 2011 | No Comments
Mischelle Watkins asked:
People who steal from you don’t normally appear with a bright neon name tag with the word, “thief,” blazed across it. They are normally the people who you would suspect the least.
Sadly the story of embezzlement is told way too many times. One particular bookkeeper had been stealing from a company for an entire 15 years and had embezzled thousands of dollars from them, forcing them into bankruptcy. Not only did their money vanish, but so did she. Poof!
Five tips to help keep your company safe:
1 – Never give your banking information to anyone – NEVER. Not a single person. Giving a banking or financial institution password to someone else is like handing the head mouse your key to the cheese room. Once you realize that you have money missing, it’s too late. That money and your bookkeeper are probably long gone by then.
2 – Same thing goes for leaving blank signed checks lying around for when you leave for holidays. It’s an easy solution if you plan on being gone and shipments are coming in while you won’t be there to pay or sign for them. This is something that many people do in good faith – a common thing. It’s done for the ease of handling business for staff, office managers, and employees. What it means to a thief is a trip to paradise without having to even forge your signature. Don’t do it.
3 – Giving signing authority on your bank accounts over to your bookkeeper – No, No, No! That’s giving authorized permission to use your accounts for anything. You are responsible – whether that was your ‘intention’ or not. In the financial industry and legal interpretation of your actions – You are held liable! Signing authority means ownership.
4 – Do not hand over your bank statements to your bookkeeper unopened. You must be the first and only person to review that document before it gets into their hands. Be consistent with this every month. Bookkeepers are often the only ones who open bank statements and their actions can be overlooked for decades before they are discovered because of this one simple letter opening task. Open all financial statements first yourself.
5 – Have a check and balance system with your bookkeeping and accounting. Let two completely different people handle each function. The accountant will be responsible for the review of the bookkeepers records and the bookkeeper will be responsible for the review of the accountants financial interpretation of the records. One will serve to, ‘look over the shoulder,’ of the other.
My own grandparents had a lucrative business and used a husband and wife accounting team. Twenty years later they were selling everything they had to cover the theft of twenty years of being stolen from. It cost them everything they ever owned and their spirit never recovered from that loss because their bookkeeper and accountant fled the country and my grandparents were left to look after the devastation those two caused. The money they lost was never recovered. It cost our entire family.
– TIP –
Thieves like to brag about how ‘honest’ they are. If the hair on the back of your neck is standing up while you are listening to a story like this – then trust your instincts.
Consistency and awareness is the key. Keep your thumb on the pulse of your business. Always.
Kansieo.com
People who steal from you don’t normally appear with a bright neon name tag with the word, “thief,” blazed across it. They are normally the people who you would suspect the least.
Sadly the story of embezzlement is told way too many times. One particular bookkeeper had been stealing from a company for an entire 15 years and had embezzled thousands of dollars from them, forcing them into bankruptcy. Not only did their money vanish, but so did she. Poof!
Five tips to help keep your company safe:
1 – Never give your banking information to anyone – NEVER. Not a single person. Giving a banking or financial institution password to someone else is like handing the head mouse your key to the cheese room. Once you realize that you have money missing, it’s too late. That money and your bookkeeper are probably long gone by then.
2 – Same thing goes for leaving blank signed checks lying around for when you leave for holidays. It’s an easy solution if you plan on being gone and shipments are coming in while you won’t be there to pay or sign for them. This is something that many people do in good faith – a common thing. It’s done for the ease of handling business for staff, office managers, and employees. What it means to a thief is a trip to paradise without having to even forge your signature. Don’t do it.
3 – Giving signing authority on your bank accounts over to your bookkeeper – No, No, No! That’s giving authorized permission to use your accounts for anything. You are responsible – whether that was your ‘intention’ or not. In the financial industry and legal interpretation of your actions – You are held liable! Signing authority means ownership.
4 – Do not hand over your bank statements to your bookkeeper unopened. You must be the first and only person to review that document before it gets into their hands. Be consistent with this every month. Bookkeepers are often the only ones who open bank statements and their actions can be overlooked for decades before they are discovered because of this one simple letter opening task. Open all financial statements first yourself.
5 – Have a check and balance system with your bookkeeping and accounting. Let two completely different people handle each function. The accountant will be responsible for the review of the bookkeepers records and the bookkeeper will be responsible for the review of the accountants financial interpretation of the records. One will serve to, ‘look over the shoulder,’ of the other.
My own grandparents had a lucrative business and used a husband and wife accounting team. Twenty years later they were selling everything they had to cover the theft of twenty years of being stolen from. It cost them everything they ever owned and their spirit never recovered from that loss because their bookkeeper and accountant fled the country and my grandparents were left to look after the devastation those two caused. The money they lost was never recovered. It cost our entire family.
– TIP –
Thieves like to brag about how ‘honest’ they are. If the hair on the back of your neck is standing up while you are listening to a story like this – then trust your instincts.
Consistency and awareness is the key. Keep your thumb on the pulse of your business. Always.
Kansieo.com