Every year small businesses become victims of employee theft. This is particularly true in small business environments where a single employee manages all the finances. Often, there are no “checks and balances” in place to verify the accuracy of certain transactions performed by such employees. It is important to protect your assets of your small business, your biggest asset being your cash. Here are some simple steps you can take to accomplish this task:
- Create a separation of duties wherever possible. For example, if one employee is responsible for the collection and/or depositing of sales, then a different employee should be responsible for reporting accounts receivable and/or reconciling banking transactions.
- Reconcile and thoroughly review your bank statements every month. Review canceled checks, question the purpose of transfers, and compare payroll reports with employee records. Ask questions when you are uncertain about transactions.
- Check Signing. Sign a check only after you have reviewed the original supporting documentation (invoice, shipping document, purchase order, etc.). Never sign a check that is not completely filled in and verify the names of vendors being paid.
- Protect your valuables. Keep blank checks and signature stamps secure. Deposit all checks and cash daily. Backup all computer files on a regular basis and store the backup at a remote location.
- Watch for changes in employee behavior. Be aware of substance abuse, changes in lifestyle, and possessiveness of work of employees.
AEMC can help your small business develop and implement any of these important internal controls. Protection of your business’ assets is one click away. Find out why AEMC is the choice for you.
