Employee thieves are not your stereotypical criminal. 90% of them are first-time offenders. They become thieves because they are given an opportunity.
Small businesses are particularly vulnerable to fraud and employee embezzlement because they lack the resources to implement strong internal controls and properly segregate duties in the accounting department. Check out this video for our best practices to protect your business from check fraud:
Today I want to talk to you about preventing small business fraud and employee embezzlement, especially as it relates to check fraud.
Small businesses are very susceptible to fraud and embezzlement because they don’t have the resources to spread out the various duties and tasks within accounting. And usually, if one person is doing everything, that’s when you get into trouble.
As it relates to check fraud, I have 3 recommendations:
- Get rid of your manual paper check stock. Lock it up in a cabinet. Put the key in a safe place. Don’t use the manual check stock for anything unless it’s an absolute emergency.
- Implement an automated accounts payable system, like bill.com. There are lots of tools out there. Get everything up in the cloud, add a workflow approval, build transparency and get rid of paper.
- Implement a company policy whereby no payments go out in any other fashion except for through that new accounts payable system. Don’t pay anything directly from the bank account, no wires, no ACHs unless it’s an absolute emergency.
Those are my recommendations for preventing check fraud in a small business.
A La CARTE Solutions is a boutique Accounting and CFO Advisory firm working with business owners to increase operational efficiencies and gain clarity over all things business and money. We would be happy to help you to learn more about preventing fraud and employee embezzlement in your small business. Just give us a call or click the Get in Touch button below.