Part-time CFO | Eliminating Fraud Risks In Business
With all the significant challenges that business owners face in business today, losing money due to fraud risk should not be one of them says part-time CFO. Thereís many things the business owner can do to minimize or completely eliminate fraud risks within their own business, be aware of all of the different ways can be at risk so that they can make the changes in the business to avoid those risks.
The first thing that business owners should understand is that by only having one person assigned to any financial task is significant risk. The reason for this says part-time CFO is because if there is only one person working on finances, there is a possibility that they may be acting dishonestly. Thatís not to say that everybody who works on finances is dishonest, but business owners can eliminate the possibility by ensuring that two people working on that task in time. Not only does this protect the business owner from fraud, it helps eliminate the instances of mistakes. If no one is checking that employees work, mistakes can be caught and fixed. As well it also protects the employees who are doing that financial work. The reason for this says part time CFO is because when two people are working on any financial file, no one will be able to accuse them of fraud because it will be able to verify whatís happening.
Another way that business owners can protect their business and themselves against fraud is to have two people working on payroll fit all times says part time CFO. There are several ways that businesses can be defrauded using payroll, and having two people working on it, business owners can eliminate that risk. Business owners also should be aware that there are several payroll processing companies that can manage a companies payroll and thereby eliminating all fraud risks this way.
One of the first ways that employee could use payroll to defraud their business, is simply by inflating the number of hours they are paying themselves, or increasing the wage they get per hour. If it is a large amount, a business owner may see that payroll isnít correct, however if they steal small amounts of money, over several months and years, and employee can steal thousands. Having two people working on payroll of time, can completely eliminate this possibility. The second way that an employee can use payable to defraud business they are working and says part-time CFO is through payroll remittances fraud. How this works is when the employee is making the lump-sum payment to CRA, they pay more than they should on their own name. When they do their taxes at the end of the year, CRA will see if they have paid significantly more in source deductions, and issue them a refund. The refund comes to them and not the company. In a roundabout way, that staff member has stolen hundreds or thousands from the business.
Business owners often have cash flow as of the problems in their business says part-time CFO. They may run out of money for several reasons, fraud of those ways. There are several ways that businesses can protect themselves against fraud in their own business, as long as they know what is putting them at risk and what they can do to avoid it.
The first things that business owners should understand is that they should eliminating the petty cash within their business. Thereís no reason in this day and age that business owners need to have any cash sitting around in their business. If a business owner needs to send employees out on errands to make purchases for the office, they can always just issue a bank card. Business owners can ask their bank for a bank card that has limited use. I card that cannot be used to make online purchases, and card that has not only a daily limit, a transactional limit. This way, a business owner can send their employees out on errands to make purchases, and not have their entire bank account at risk. If they do have fraudulent charge on the card, they know who is at risk and how to deal with it.
Another easy way that business owners can eliminate fraud risk in their business is by being very mindful of their checks. Not only should they be aware of their own think checks in their business says part-time CFO, but they also need to protect the checks are coming into their business. The reason for this is because banks do not check the signatures on the checks they receive. Business owners are under the assumption that banks are safeguarding their accounts by reviewing every signature on every check that comes in. And this just isnít the case unfortunately. Business owners need to protect checks as though they were cash. That means they canít the checks lying around, they should deposit them into the bank as quickly as possible. Understanding that banks do not protect businesses against fraud this way, can help business owners handle checks responsibly.
The third way that business owners can minimize fraud risk in their business is extremely simple says part time CFO. They need to ensure that nobody shares their credit card credentials. Most people know that they shouldnít be sharing their credit card credentials anyone, that business owners often have a group of company credit card where the entire office knows credentials in case they need to make purchases. Business owners should understand that if they do have a company credit card, only one person should have those credentials. If an employee absolutely does need their own company credit card, part-time CFO says they need to manage their own credit card credentials, that way if any fraudulent charges appear on it, a business owner knows who is responsible. A much better option and so having a company credit card is to have a company debit card as described above.