Part-time CFO | Fraud Risk Protection In Business

There are actually many ways that small businesses are at risk for fraud says part-time CFO. A lot of these risks are unnecessary and can easily be eliminated. The biggest problem is that business owners donít know what they are at risk for, unless someone tells them. Many business owners donít even know their risk until they find out that they are the victim of fraud in their own business.

There are many ways that business can protect themselves against fraud within their own business. One of the most significant changes that business owners can make in their business in order to protect themselves is by ensuring that more than one person is assigned to financial tasks in their business. Although many business owners donít believe they can afford the wages of having two people work on finances, but this is the situation says part-time CFO where the costs definitely outweigh the risks. Having two people work on finances can make the work go faster, but as well can so easily reduce the risk of fraud that business owners should see this as a cost of minimizing risk. If business owners are truly unable to have two people work on finances may be perhaps because they donít have the manpower, an option that could be suitable for them sending out as many financial tasks as possible to outside sources. If a business owner can send certain financial tasks to an outside company to work on, they can immediately remove the risk of fraud from their business.

Another way that business owners can reduce the risk of fraud in their business is to continue having regular meetings with their accounting team. This is definitely very helpful not only for the county team, but also for the business owner. It doesnít need to be a long meeting, but this is a chance of where the accounting team can ask questions or point out errors or discrepancies, or a time where business owners can ask their own questions. This creates a check and balance system that can be helpful to an accountant for solving problems sooner rather than finding out larger mistakes later says part time CFO.

Business owners can also reduce their fraud risk by ensuring that if thereís any employees that need to access the company bank account in order to work on finances, have a read only access. This means they can see all the activity thatís happening in the bank account, but they are not able to disburse cash. Part-time CFO says that this is extremely helpful for businesses that canít afford to have multiple employees working on finances, and can protect them against that employee moving cash in an unauthorized way.

Another way that business owners can avoid fraud risk in their business is to completely eliminate the petty cash fund. There is no reason why business owners need to have cash on hand in the business anymore says part time CFO.

Business owners often only have one person in their business in charge of the accounting says part-time CFO. While it works great for business, business owners may not understand that they are opening themselves up to significant fraud risk by only having one person working on that. Business owners often discover far too late staff member was stealing money from the company. Protecting themselves against fraud is very simple as long as business owners know what situations to avoid.

One of the biggest ways that businesses can be divided is through payroll processing. Itís extremely easy for people who are running payroll in their business to inflate their age per hour or inflate the number of hours that they worked. If nobody else is working on payroll with them, there is virtually nothing that is stopping a dishonest employee from inflating the amount of money they will get says part-time CFO. Often employees who do this, will make sure that theyíre not stealing a large amount of money so they can avoid arousing suspicion. Their goal will be to steal smaller increments of money over a large period of time. Documented cases of this happening is shown businesses that an employee can get away with this over several years even decades stealing upwards of $100,000. Business owners need to ask themselves if this is a risk that is worth taking. While it may be more expensive to have two people working on payroll, Iím sure a business owner would rather pay that additional cost upfront to avoid having significant amount of money stolen from them later.

Another way that businesses can be defrauded through payroll is if a employee uses payroll remittances in order to defraud the business. The way that works says part time CFO is when the employee is calculating how much and payroll remittances to pay the CRA. They figure it out and then add an additional lump-sum on that amount crediting it to themselves. At the end of the year, CRA sees that they have paid far more in source deductions and send them a refund. Employees can steal quite a bit of money this way, and it can be very difficult for a business owner to catch. The reason for that is unless a business owner is figuring out the source deductions themselves and comparing it to the amount the employees send to the CRA. Itís far easier for a business owner to have the two people working on payroll in order to avoid this circumstance were happening.

Business owners can definitely help to people working on payroll in order to avoid payroll fraud within their business, but another option that business owners can consider when they are trying to eliminate payroll fraud is to having a outside company run their payroll for them. This can be extremely cost-effective says part-time CFO,and can also immediately eliminate the risk of the payroll fraud from happening. If business owners want a surefire way to avoid this type of risk completely best way to do it.