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 Here
are the facts: Small businesses, especially those with fewer than 100
employees, are especially vulnerable to embezzlement. And it’s
usually an inside job.
Why?
In small businesses, everyone wears more hats. With less segregation
of duties, it’s easier to hide the crime.
And,
chances are, your agency feels a lot like family—full of people
you like and trust.
Maybe
there is no reason to suspect anyone (and you probably don’t want
to), but nothing is people-proof. Use these deterrences, because you’d
hate to learn the hard way that you should have been suspicious.
Surprise! Do unscheduled cash audits to uncover any cooked books.
Have financial information mailed to your home instead of the office.
Make everyone take an annual vacation, and don’t let their work
sit until they return. When someone else picks up responsibilities,
interesting things always turn up.
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Separate financial responsibilities. The person who adds A/R shouldn’t
also add and sign checks or do the bank rec. Still another should pick
up the mail. Better yet, have all of your financial statements mailed
to the principal’s home address.
Talk to clients and vendors to ensure that payments are being made.
(Think of it as a schmooze opportunity.)
Scrutinize expense accounts and reimbursements. (One exec tried to deduct
the same steak dinner three times. Busted!)
If
you catch someone in the act, prosecute. It may be painful—especially
if they were a trusted employee—but it sends a loud, clear message
to everyone else. It hurts to think that people you trust might try
to take advantage of you. But it would hurt even more to lose a life’s
work to a greedy, soon-to-be ex-employee.
Judy Salkind is a senior member of the Clients & Profits Helpdesk.
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