Ask the Accountant…
Question: Are there things I should do to protect my business from fraud?
Answer: That is a great question and is one that is often overlooked. I recently read an interesting article in the Woodard Report titled Basic Fraud Prevention for Small Business Owners.
Far too often I see distributors delegate nearly everything to their bookkeepers or other employees, opening themselves up to the risk of fraud.
The article is worth reading, but I’ll highlight a few things here.
You should restrict what parts of your QB your employees can access, dependent on their jobs. For instance, an employee entering vendor bills does not need access to your bank account or financial statements.
Review your bank and credit card statements monthly. Too few owners do this. Do the charges and withdrawals look correct? Is the credit card being paid down as you expect? Just because you see credit card payments on your bank statement does not mean it’s your credit cards being paid down. Think about it.
Review your payroll reports and make sure that the payroll taxes are being paid appropriately to the IRS.
Do not give payment or signing rights to someone recording payments in QB. These functions should be separated.
It’s worth the time and effort to keep tabs on your business with some simple, routine steps.
Please email accounting questions you would like considered for the column to [email protected] with the subject line of “Ask the Accountant”.
