Part-time CFO | Avoiding Fraud Risks In Business
Business owners who have only one person in charge of their accounting often run significant risk of fraud in their business says part-time CFO. The reason for this is because with only one person working on finances makes it possible for that one person to act dishonestly. One of the easiest ways that business owners can easily eliminate fraud risk in their business is by having two people on any financial task at a time. It is also several other ways that business owners can minimize fraud risk in their business simply and easily this article will discuss several of those ways.
Another way that business owners can easily eliminate fraud risk in their business is my understanding that banks do not check the signatures on checks. Many people assume that banks are checking every signature on checks and that someone tries to cash a fraudulent check that banks will catch it, but this is not true. If business owners understand that banks are not checking, they can take action to ensure that their checks are kept safe. The biggest thing that they need to do says part time CFO is protecting their checks as if they are cash. Lock them up when they are received, and deposit them into the bank as soon as possible. This goes for blank checks in the business as well as the checks they receive.
Business owners also can reduce fraud risk in their business by understand that petty cash is a fraud risk and they can use debit cards to avoid it. Part-time CFO says that not only are petty cash funds fraud risk but they are also an audit risk, and not using bank cards is a simple and easy way of avoiding fraud and audit risk. They need to do is ask their bank for a debit card with a daily limit of transactions. They can also ensure that the bank card is locked so that no online purchases can be made from it. If employees need to make purchases, they can use the bank card. If fraudulent charges appear on the card, a business owner can see it right away, and that only a few hundred dollars for risk instead of the entire bank account.
The way that business owners can quickly and easily eliminate fraud risk, is by ensuring that they donít share credit card credentials with anyone, including employees. If there is an employee that needs to have a credit card, they should have their own car their own credentials. If there is a group company credit card, itís extremely hard to know who did fraudulent charge appears, and there is significantly more money at risk. It one credit card per person, and ensure that they are in charge of their own credit card credentials.
These are some great and easy ways that business owners can eliminate and minimize fraud risk within their business says part-time CFO. Ensuring that their business is kept safe.
50% of all businesses are out of business in five years, and 29% of these failed businesses will cite that they ran out of cash says part-time CFO. With cash will being such a serious issue in business, business owners should take care that they do not impact their cash flow even more by becoming the victim of fraud. There are some simple and easy ways that business owners can minimize and eliminate fraud risk within their business.
One of the first things that business owners can do to minimize fraud risk in their business is by having two people assigned to any financial task at a time. The reason why having only one person working on a financial task is a significant risk says part time CFO is because it increases the chance that the one person can commit fraud. Thatís not to say that every person working on a financial task is dishonest, but by eliminating the opportunity, business owners donít have to worry about if they are dishonest or not. If business owners are too small and canít afford having two employees on task because they donít have enough people, they can also understand that outsourcing financial tasks is a possibility that will also completely eliminate fraud risk from their business.
People can easily defraud a company through payroll, part-time CFO says payable fraud is extremely common, and one of the reasons why they should be two people on any financial task. The first way that most dishonest employees defraud the company is using payroll, is by inflating the hours they are paying themselves on payroll, inflating the wage per hour. If they get away with it, they can steal thousands of dollars over several years. This is completely minimized by having two people on payroll at a time. Our business owners can of people completed by a third-party payroll provider, which completely eliminate the risk.
Another way that dishonest employees can defraud businesses using payroll is through payroll remittances. Part-time CFO says this is extremely hard for business owners to catch. What the dishonest employee does, is figure out how much source deductions to pay CRA, but then pay more money than is necessary that onto their own name. They send a lump-sum payment to CRA, and the business owner sees that CRA is being paid, and unless they check the exact number by hand and compare what is been paid, they just see that CRA is being paid. In the end of the tax year, CRA sees that that when the employee has paid significantly more in source deductions, and they send them back and check the difference. The employee gets the check, cash it and keep the money on to the business owner is out the money.
Business owners can very easily minimize and eliminate fraud risk in their business by taking some simple steps to ensure that they have two people working on financial tasks can easily outsource those activities.