Part-time CFO | Helping Businesses Avoid Fraud Risks
Business owners face enough fraud risks within their business every day, that it is very prudent for them to eliminate the risks they might have some areas of their business some of those risks can be internal fraud risks. Avoiding and completely eliminating them from the business is much easier than business owners realize, once they know what to look for. There are several ways that business owners can decrease the risk of being divided by their staff, which can help them see business success.
One way that businesses can be careful in order to avoid fraud risks is through the use of company credit cards and debit cards. Part-time CFO recommends that business owners actually donít have company credit cards unless they are absolutely necessary. A great option for companies is to get a company debit card with daily limits as well as transactional limits. They can arrange those bank cards to be able to process online transactions. This way, employees can make the purchases throughout the day that is needed for the business, but they are not giving the employees the entire bank account will to access. If an employee does use the bankcard fraudulently, they are only accessing a few hundred dollars instead of be able to take several thousand. It is not recommended all that business owners have company credit cards, unless it is absolutely vital. Best practices that include only give the company credit cards to the employees that absolutely need to have a credit card, and ensure that they are the only employees with the credit card credentials. If fraudulent purchases are made says part-time CFO, the business owner will know exactly who is at fault for the fraudulent charge.
Another way that businesses can avoid fraud risk is through their payroll processing. There are several ways for dishonest employees to defraud their company, they can be easily eliminated. The first way that employees defraud businesses is simply by inflating their hours or the wage per hour that they get. They still small increments of money payroll, and several years later, the amounts that they have gotten away with stealing is several thousand. Since this is not likely to be discovered by the business owner, at least not immediately, is a common way that business owners get defrauded. Another way that employees can defraud businesses through payroll is through payroll remittances. How this works says part-time CFO, is that they calculate all the correct source deductions to pay CRA, and then add additional money onto their own name. At tax time, CRA discovers that thereís too many payroll remittances submitted and that employeeís name, and issue a refund check the. The only problem is, the refund check goes directly to the employee and not to the business owner. The employee cashes the check, and in a roundabout way steals from the company. The best way for business owners to completely mitigate these payroll fraud risks, is added by having two people work on payroll at the same time, or outsourcing payroll to a third party payroll processing company.
Entrepreneurs often worked so hard in their business and donít realize a lot of the risks that are facing their business head on says part-time CFO. By not saying these risks right in front of them, business owners are help us to avoid them. Some of these risks are the risk of being defrauded in their own business. By being aware of the ways that dishonest employees could steal money from the company, a business owner can easily safeguard the company against them. Since 29% of all businesses who fail say running out of money was one of the main reasons why they close the rest of their business, helping business owners avoid theft and fraud in their own business can help them keep their cash flow positive.
The most simplest things that business owners can do in order to safeguard their company against fraud, is being extremely careful with their checks. Many business owners think that once they sign the check, itís protected because they believe the bank is always checking the signature on all checks to ensure that there is no fraudulent checks being passed. However says part-time CFO, this isnít the case. Banks rarely if ever check signatures on checks. Therefore the easiest thing that a business owner can do in order to avoid this risk is to treat their checks very very carefully. Business owners treat their checks like cash, they can avoid a lot of the problems.
Another suitable way that business owners can avoid fraud in their business is by using an electronic fund processer. The way they would use this says part-time CFO is creating a set schedule that funds are disbursed on. A business owner or their accounts payable staff can organize all of the payments that are big going to be coming out on that day, and all of those payments come out in one lump sum. The reason why this is helpful, is that it allows business owners to check ahead of time what payments can be coming out of their account, is about it limits how many cash disbursements are going to be going to their bank account every day and changing it to once every couple of weeks. This is much harder for employees to sneak in unauthorized payments, and also makes it much simpler and easier for the business owner to double check.
In addition to these days that business owners can avoid fraud within their own business, entrepreneurs should also know that they should continue with having regular monthly meetings with their accounting team. The accounting team might have questions with the business owner, be able to report suspicious activity, and itís a good idea for business owners to check in occasionally. This is the team thatís going to help them keep their cash flow positive and regular meetings can help towards that goal.