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The first risky behaviour that businesses can avoid is only having one person assigned to a financial task. The reason this is risky behaviour says part-time CFO is because without having two people work on a task, there is high potential that the one person who is working on that task can steal money in a variety of ways. Just because the potential is there, doesnít mean it will happen, whoever business owners want to ensure that it never will happen, can take precautions. If business owners donít believe they have enough money to pay for a second person to work on that task, they can always consider outsourcing as an alternative. It can be cost-effective and it can be 100% effective in minimizing risk to the business owner.
Business owner may also have one person working on the payroll of the business, and there are several ways that a dishonest employee could steal from the company through payroll. The first way is simply by inflating the number of hours they are calculating for themselves, or increasing their wage per hour. This is especially frustrating because many employees donít consider this theft. Stealing time and stealing increased wages can add up significantly over a long period of time says part-time CFO, and business owners can completely eliminate this risk by having to work on payroll at a time, or completely outsourcing it entirely.
Another way that businesses can fall victim to fraud through payroll is more complex, and harder to catch. What a dishonest employee will do, is calculate all of the payments through payroll remittances and send one lump sum to CRA says part time CFO. However they will calculate higher remittances then asked they were deducted from their paycheck. At the end of the year, CRA will see that they have more remittances taken from that employee than was necessary and will issue a refund check. However the check will go back to that employee rather than back to the company, allowing the employee to pocket the money and steal from the company. This is extremely hard to catch unless a business owner is double checking all of the remittances by hand and comparing that to the lump sum payment that was made.
Cash flow is so important to small businesses, that is the reason why several businesses fail each year says part-time CFO. There are several reasons why cash flow is limited in the business, and unfortunately one of those reasons is due to fraud within the business. Businesses can easily eliminate several fraud risks within their business, by being some very simple things. They just need to know why they are at risk, so they can avoid them.
Often business owners have one credit card that they use for all of the purchases, and everyone in the office shares that credit card payments and the credit card credentials. This is extremely risky behaviour says part-time CFO, because if someone thinks that card makes a fraudulent purchase, the business owner is virtually no way of knowing which employee committed the fraud. It also opens them up to be on the hook for several thousand dollars worth of charges. Businesses that need to have employees purchase things from time to time are better to get a company debit card. The reason for this is because they can lock that card against online purchases, and they can put a transactional limit as well as a daily limit on that card. Employees can is a card to make purchases, and if they steal money from the card, at least the business owner will be out only a few hundred dollars and set of thousands. Credit cards definitely should be guarded very carefully and not used by multiple people.
Another way that businesses can guard against fraud from inside your own company, is by having read only access on their bank accounts, so that when a employee is working on company financials, they can see all of the activity, but they will be unable to disperse cash. This is a great way for business owners to get the financial tasks that they need to accomplish done, but risk-free in their business. They just have to ask their bank to set up read-only access. Unless an employee needs to disperse payments as part of their financial duties, there is no other reason why a staff member should have free access to the entire bank account.
The third and simplest way that the businesses can guard against becoming the victims of fraud right from inside their own company says part-time CFO is by ensuring that they have more than one person assigned to work on financial task at any given time. This protects the business owner from fraudulent activities, because itís much harder for someone to defraud a company when they have someone that they are working with on the task. Also it safeguards the company against errors, but not having someone else reviewing the work of someone working in a financial position in the company, business owners have no way of knowing if mistakes are happening or having a way to catch them. These mistakes can end up being extremely costly.
