Part-time CFO | Fraud Risk Elimination And Business
One of the ways that businesses unnecessarily open themselves up to risk in their business says part-time CFO is through employee fraud. This is a very serious and very common way that businesses get defrauded that can quickly add up. One of the reasons why is the fact and one can only wonder how much employee fraud plays into this number. By learning all of the different ways that a business can be at risk, business owners can ensure they minimize or completely eliminate those risks.
Business owners often only have one person working on their accounting or financial files. This is actually a huge risk that they donít know about says part-time CFO because there are several ways person easily defraud a company. The first way is simply through payroll. A business owner may not understand how payroll can be so risky, but thereís by not ensuring that two people are working on that payroll, business owners can open themselves up to unnecessary risks. The first way that employeeís productivity through payroll is inflating their earnings. If there is no Double check system, and an employee does not have someone reviewing their work, then it makes it very easy for that employee to commit payroll fraud. All they have to do is increase the number of hours worked, or increase the wage per hour, youíre making more money per month. Rather than stealing a lot of money right away, employees can keep this to a small amount and eventually steal a lot of money over a significant amount of time. Sometimes business owners have discovered this error after over a decade and realize that they have lost over one hundred thousand dollars. This is completely avoidable.
In the way that employees can defraud business payroll says part-time CFO, is using payroll run businesses many business owners arenít even aware that this is possible, but employees calculate the amount of source objections that need to be paid to CRA and add a little bit more lump-sum. They sent it off to the CRA that additional someone is in their name only. That way, tax season comes, CRA thinks that that employee has paid more in source deductions, and will issue them a refund. Lots of money can be lost this way, almost impossible for a business owner to detect because even if they double check that employees work, theyíll just the lump-sum payment to CRA and unless they know that the lump-sum payment was wrong, and employee can get away with this for several years Or indefinitely.
Even though these are very serious ways that employees can defraud the company, itís extremely easy to avoid. One of the ways that they can avoid it is simply by having two people working on that financial task. Business owners need to consider if they can afford to pay additional wages for staff to work on finances, or if they should be more later when they get defrauded. Another option is as part time CFO is simply outsourcing payroll. By outsourcing their payroll, business owners can immediately mitigate the risk.
Entrepreneurs often arenít aware of the fraud risks that exist within their business says part-time CFO. Without understanding all of the risks that face, they are powerless to change their systems in order to avoid them. Helping business owners understand all of the various risks they face help them eliminate and rise all fraud risks. As fraud risks, business owners will be able to run their business a lot more effectively without worry.
Fraud risks in the business is to get rid of their petty cash fund. Part time CFO says there is absolutely no reason why businesses should be carrying any kind of the cash in their business. They should deposit all of cash to the bank every day, only the ones needed for a float in their business. Any payments that employees need to the business day can easily be done with a company debit card. Part-time CFO recommends that businesses use debit cards is that of credit cards, because itís much easier to minimize the risk with a debit card. business owners can ask their bank to put limits on the card to work for online purchases as well as put limitations on records such as how much money can be used per transaction and how much money can be taken out per day. Employees commit fraud card like this, business owners can be assured their of losing only a couple hundred is that of a few thousand.
Business owners can also be at risk for fraud if a employee is working on accounts payable alone as well says part-time CFO. Many entrepreneurs donít know how a employee could defraud them simply by writing checks on invoices, but one of the most common account payable frauds is when an employee uses a dummy corporation. How they do that is they create a payable to a corporation. That corporation doesnít exist, and they simply cash the check themselves. Business owner is reviewing payables, they see that there is a payable to corporation and it looks legitimate. Business owners need to know that they see a charge that seems odd, it probably is. Just because it looks like legitimate company doesnít mean it is a legitimate payment.
An effective way that business owners can guard against this type of accounts payable fraud risk is by using electronic fund processors on a set schedule. This way business owners can set up what schedule theyíre going to pay on, and then all payables will be done on schedule. It eliminates the amount of transactions that are coming out of the bank on a regular basis, making it much easier for business owners to track what payments are convenient. Payments are set up ahead of time so business owners can review it before they come out and fix any mistakes before theyíre paid.