Do you think you can trust your bookkeeper…?

…think again!

Now, I’m not saying that everyone has an untrustworthy bookkeeper or accounting clerk. Obviously that is not the case. But what I am saying is that you need to take steps to ensure that your accounting is protected – no matter what!

I’ve seen too many situations where business owners hand over their accounting books to a family member, a good friend, or an employee/consultant while assuming that that individual cares about the finances as much as they do, only to find out that they are not doing a good job or embezzling over a period of time. I have several stories of average business owners in my book, How to Get Poor Quick, to help you look out for the signs. In the meantime, I have identified some MUST DO’s for you to consider (well, actually, for you to follow!):

* Be sure the person writing and/or signing the checks is not the person who opens the bank statements.

* As the owner, open the bank statement and look at every single transactoin to ensure they were authorized.

* Set up a Purchase Order system so that all purchases must be authroized by the appropriate manager.

* Require 2 signatures for large purchases (i.e. over $500).

* Don’t us a signature stamp! All checks are to be signed by the authorized check signers.

* Compare your Profit & Loss statements monthly and annually to see if there has been any increase in one certain category. An increase in “office supplies” might indicate someone is stealing your inventory for personal use.

* Let you staff know that you are monitoring and managing your money! This will deter someone from stealing if they know you are watching.

In most of the cases that someone has “stolen” funds from their company, it was because:

1. They weren’t being watched and they were allowed to have too much freedom in managing the money.

2. They were having financial troubles – divorce, bankruptcy, etc.

3. They realized how easy it was and became “addicted” to stealing.

And, believe it not, probably half are “good, decent” people who really mean no harm. But, PLEASE, don’t be afraid to start now and put your policies and procedures in place. Hopefully, you don’t find something wacky, but if you do, better sooner than later!

Lastly, your bookkeeper will THANK YOU for taking the temptation away. If they are offended, find yourself some new help. This is your livelihood and you have every right to protect it!