Protecting Your Business Against Employee Fraud
Employee theft is surprisingly common and can devastate your business. Consequently, it is worthwhile to put an anti-theft program into place, which includes internal auditing and monitoring. By following a few Do's and Don'ts you can minimize the risk of employee fraud.
DO regularly review your financial statements.
DO deposit your cash and checks daily.
DO secure your blank checks and signature stamps.
DO carefully monitor a new employee who is responsible for buying goods.
DO periodically have an individual hand out payroll checks and confirm that absent employees are actual employees.
DO periodically compare payroll payees with employee records.
DO regularly review bank reconciliations.
DO distribute responsibilities among employees so that a different employee collects receipts, makes out deposit slips, reviews bank statements and writes checks.
DO periodically open your own mail and compare payments received with deposits.
DO periodically hire an outside accountant to audit your books.
DO require two signatures on checks over a certain amount.
DO review billing error complaints from customers.
DO require that original invoices be kept in the files.
DO maintain and monitor a list of your property that is subject to theft.
DON'T allow accounting personnel to work longer than a year without taking a vacation.
DON'T sign blank checks.
DON'T hire employees without checking references.
DON'T sign checks for new vendors without verifying their name and association with your company.
DON'T allow transfers between accounts without verification.
DON'T sign checks without reviewing and canceling paid invoices.