From personal lives to professional lives and everything in between, worrying about money is one of the things that we all do. When you are a business owner and assessing the financial results of your business, that worry can be even greater. The reality is, you have a right to be worried. Cash is wanted by just about everybody, so your business profits can be in jeopardy.
Protecting your business from theft and learning how theft and fraud is attempted in the place of business can help you stay vigilant and keep you on the forefront of employee theft prevention.
Inflated or Irregular Charges
A look at invoices, cash receipt journals, accounts and more may reveal cash fraud or embezzlement. Often, small extra charges could be tacked on that could otherwise be missed. When there’s no clear explanation as to what the extra is for, this could be fraud.
If employees are required to punch in and out, other employees could be punching time cards for days when that employee him/herself isn’t actually working. It might just be a few hours here and there, but it does add up. Not to mention the obvious loss in money spent on wages when there isn’t someone working, there is the loss of production and potential availability to your clients or customers, depending upon the industry or nature of your business.
Since very few tellers actually take a look at the signature on a company check, employees could be stealing checks from a workplace or office and cashing them just once, or on a regular basis in order to get more money in their pocket. Employee working in the accounting department have access to checks and cash and falsifies “petty cash” receipts, it may look legit where it truly isn’t.
Theft can also be present in the mailroom. While it may not be something that is as common, it still can happen. Invoices and payments that are sent through the mail could be intercepted and diverted or the evidence destroyed even before it made it to accounting. Since there is no formal record of it arriving, another invoice or payment could be issued and no one would be the wiser as to what happened in the actual mail room itself. Herein lies a problem now for not only one company’s records, but now two.
While this may not be done as often in the professional white-collar sector, anything is possible; where employees are paid in cash, someone could remove a few bills from each envelope before they are handed out to the respective people. It could be another employee or someone who wants to “skim a little off the top” where they see that they can get away from it. Skimming can happen just about anywhere – from petty cash boxes, tip jars, cash registers and the list goes on.
What to do about it
Understanding where potential vulnerabilities are located and taking the necessary actions to review processes involving your cash could be at risk, is half the battle. It is your job to hire good people, but also to lead them and sometimes hire a third party like Palma Financial Consulting, LLC (PFC) to review your procedures and identify where you are most vulnerable. This puts you in the know and at the forefront of fraud risk prevention in your company.
In terms of actually protecting your business from theft and making sure that everyone who comes through the door isn’t helping themselves to your cash, you don’t have to deal with it yourself. A forensic accountant is your best chance at staying on top of potential financial risks and protecting yourself and your business from fraud as well. Contact PFC at (281) 668-9168 to get started or with any questions.