An important part of owning a business is having in place proper checks and balances to prevent fraud within your company. While you may not be able to foresee every possible scenario, you can implement procedures to help minimize costly surprises. Unfortunately, fraud doesn’t discriminate based on the size of the company. Even if your company is small, there still can be risk of fraudulent activity. How do you prevent fraud from happening? Here are a few ideas: Top 10 steps to prevent fraud |
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1. |
Make sure every bill has a purchase order or has been signed by the person who authorized the purchase. |
2. |
Limit the number of people who can authorize purchases and establish a dollar limit. |
3. |
Keep blank check stock locked up. |
4. |
Always use sequentially numbered checks and review the check register to account for any missing checks. |
5. |
Limit the number of people who can sign checks. |
| 6. |
Do not use signature stamps or pre-signed blank checks. |
| 7. |
When reviewing an invoice from an unfamiliar company, call the company to verify its legitimacy. |
| 8. |
Have bank statements sent to your home. This allows you to review them prior to giving them to your bookkeeper. |
| 9. |
Have a person other than your bookkeeper reconcile the bank accounts. |
| 10. |
Periodically review the payroll register for accuracy of wages, hours worked, and check that no fictitious or terminated employees are included. |
These are just a few ideas to help you develop your own procedures. Depending on the size and setup of your company, there may be some additional considerations to implement.
Rusty Fulling established Fulling Management & Accounting, Inc. to take care of the daily business details of small and medium sized companies so that you, as owner, can focus on growing your business.
