7 Ways to Protect Yourself Against Bookkeeper Fraud
Sadly, bookkeeper fraud is all too frequent. Be smart and
be aware. With a little caution, you can dramatically reduce
your chances of being a victim. Here are seven tips that
will help you.
- Never give your online banking information to anyone,
period. Password access to your account is just an engraved
invitation for someone to dip his hands into the cookie
jar. By the time you realize the money is gone, your bookkeeper
could be too.
- Never have blank signed cheques anywhere. This is a common
mistake; many business owners leave signed cheques with
their bookkeeper or staff for the sake of convenience. But
it means that cheques to unknown payees and in unknown amounts
can easily be made out – and the perpetrator doesn’t
even have to forge your signature!
- Never give signing authority on your bank accounts to
a bookkeeper. You open yourself to abuse if your bookkeeper
has legitimate power to write cheques without your knowledge.
- Personally check your bank statements each month. Question
any entry or cheque that you don’t recognize. Bookkeepers
often go years without being detected simply because they
are the only ones who actually watch what goes through the
bank accounts.
- Separate your bookkeeping and accounting roles. Two pairs
of eyes on your books can provide a critical set of checks
and balances. The accountant can review the bookkeeper’s
records and vice versa, ensuring each person is held accountable
and deception is more likely to be caught.
- Match up cheques to a supplier’s invoice. If there’s
no invoice, investigate. Where is this money really going?
Also keep an eye out for phony or inflated invoices. One
way to minimize the risk of a phony invoice is by having
purchase order numbers and matching those numbers to invoices.
- Keep an eye out for duplicate cheques. One bookkeeper
had a nice racket going with the two partners of a firm.
Each partner had full signing authority on the bank account.
Every month, the bookkeeper would present a cheque to the
first partner for her invoice. She would then present an
identical cheque to the second partner for the same invoice.
Because neither partner checked the bank statements, no
one was the wiser.
These few small controls can make
a world of difference to the integrity of your business. Do you have the proper fraud controls
in place? If you’d like a more detailed analysis of
your business system, call us for a consultation at (416)
861-8177.
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