Part-time CFO | Fraud Risk Minimization In Business.
One significant problem that businesses face with operating company is a cash flow problem. Almost one third of all failed businesses will say that this is the reason why they had to close their business says part-time CFO. Helping businesses avoid cash flow problems within their business is a significant challenge that can vastly improve a businesses chances of succeeding, and one way businesses can guard against something that can affect their cash flow is protecting themselves against fraud. Many businesses donít consider that they are at risk for fraud, and therefore donít know what they can or should do in order to minimize those risks.
One of the first things that businesses can do to help keep those risks down is continue having a monthly meeting with their accounting team every month. Part time CFO says this is a vital part of checking up on the financial health of a business. They need to have regular touch points with their accounting team, in order for the accounting team to ask the business owner questions and vice versa. They can clear up any errors as well as catch any problems while theyíre happening, rather than years later. Business owners who are trying to save money, should definitely not avoid this meeting, because this is money well spent. Theyíre not going to save themselves enough money on that monthly 15 minute meeting, and it can save them a lot more in the long run.
Business owners should also be very careful when they are dealing with the checks in their business. Part-time CFO says that businesses arenít as careful with their checks as often as they should because they make an assumption that their financial institution is regularly checking the signature on the checks they receive. This actually isnít the case, therefore business owners need to be very careful when they are handling checks in their business. They need to treat them exactly the same as cash. That is to say they need to deposit them into the bank as often as possible, and avoid having them lay around.
Business owners can also mitigate risks in their business by ensuring that any staff that are working on their finances are only accessing the company bank accounts and have read access on it. This way the employee can see all of the various financial information they need to do their job, they arenít able to move money around. Part-time CFO says this is a great option for businesses to get to employees on a financial file but still need them to get work done.
Another fraud risk that businesses can minimize is ensuring that they donít have a company credit card with shared credentials. The reason for this is part time CFO is because if a credit card is shared credentials, if fraud is committed on the card, a business owner may not know who committed that with fraud. These are some extremely easy ways businesses can guard themselves against fraud.
Many business owners operates there business on a shoestring budget says part-time CFO, and because of that we only have one person in charge of the accounting. A business owner doesnít have time to double check what they are doing, or assumes that the person is making no errors and years later, discovered that they have money missing. This scenario is far more common than many business owners believe. Not only is it very common, itís also very avoidable. Business owners can learn some very simple fraud risk minimization techniques in order to help safeguard their business against fraud.
One of the ways that businesses are at risk for fraud is by the accounts payable staff. One of the ways that payroll staff can defraud a company is when they use a dummy corporation. The staff member creates a payment to a fake corporation, pockets the money and if the business owner double checks, they will see a payment to what appears to be legitimate business. Business owners need to be very aware that even if it looks like itís a legitimate business, they should check into any payments that donít seem quite right.
When my that business owners can avoid against this type of fraud is by ensuring that they have two people working on any financial file at the same time. This way a dishonest employee will not be able to get away with negativity because they have someone else reviewing their work. Part-time CFO says this is a simple and easy fix that can immediately minimize risks. Business owners may also want to consider outsourcing this aspect of their business to another company. It can completely eliminate the risk and free up that staff member to work on different tasks.
Another way that business owners can guard against account payable fraud is by using electronic fund processors on a set schedule. How this works says part-time CFO is that a business owner sets up how often they want those cash disbursements, once a week twice a month for example. All payments are organized ahead of time and then on the set date, they all come out at the same time. The business owner can easily double check if this is correct, and fix it if there are any errors. This can also be much easier to track, because it will show as a big lump sum coming out of the bank account on a regular basis and it will eliminate that number of transactions helping out of the business on a daily basis. This can help business owners manage their payables as well as make mistakes much easier to catch. This is very easy and simple process that can be very effective in minimizing fraud risks within a business.
Business owners should be very sure that minimizing progress within their business is very simple as long as they know what they should look for.