Most 5 star CPA Google reviews in Canada
Helping Canadian businesses beat the odds!
Many business owners are very trusting when it comes to the financial operation of their business says part-time CFO. They fired one person to be in charge of their accounting, and donít realize until itís too late that that person had been defrauding the company for years. This is all too often a common story with small businesses that can be very easily avoided. By helping business owners see the potential for fraud in their business, can help business owners close the gap protect their business from these types of fraudulent activities. A lot of business owners make these errors, because they do not know any different. Helping business owners avoid fraud help them succeed in business.
When business owners are hiring someone to work on their finances, there are several things that they can do to minimize fraud risks. One of those is to create an access levels for their bank account that is read only. Read only access will allow that employee to see all of the activity in a bank account, but actually access and disorders cash does not exist. This can be very official to business owners who need finances worked on, but donít need payments done. Part-time CFO says that this is extremely beneficial and should be the first thing that businesses do when they hire accounting staff.
The thing that businesses can do in order to mitigate fraud risks in their business is if any of their financial staff will be actually disbursing cash at any point, to make it policy bit two people will be working on that task at the same time. The reason for this says part-time CFO, is so that it can eliminate the possibility of one person being fraudulent because they are being watched by a second person. It helps keep people honest, and also protects those people from accusations of being dishonest. If thereís two people on task at all times, nobody can accuse them of being dishonest.
Business owners can also avoid fraud risk by completely eliminating the petty cash usage in their office. Many business owners continue to use petty cash, and thatís not only a fraud risk says part time CFO but itís also an audit risk. An extremely clean option would be to get a bank card for the office. Entrepreneurs can log that card so that online purchases cannot be made with it as well as setting and transactional limit and the daily limit. This way staff members can be able to buy anything thatís required throughout the day, without being able to access thousands of dollars at a time to do it. If an employee does is it for fraudulent purposes, the business owner has only lost a few hundred dollars instead of a few thousand.
By utilizing these easy to implement systems into their business, business owners can not only decrease fraud, but completely eliminate the risk in some circumstances as well as protect their own employees from accusations.
Entrepreneurs often donít know what they donít know when it comes to operating a new business says part-time CFO. And all too often, businesses learn what not to do the hard way, after their staff have been found guilty of defrauding them for thousands of dollars. For businesses who are struggling with cash flow, which is most of them, the last thing they need is someone decreasing their cash flow with the fraudulent activities. The good news however is that protecting themselves against fraud within their own business is simple to do and easy to implement.
Many business owners arenít aware of the amount of fraud that can happen when it comes to payroll. There are several different ways that their employees can steal money while doing payroll. By having two people work on payroll at the same time, business owners can safeguard against these risks. The first way that a staff member defraud their company is through inflating the hours that they worked or inflating the wage per hour that they get paid. This is unfortunately extremely common way of stealing money from the company says part time CFO. Many employees donít even see this as a theft, saying that they believe they are owed that time or that money. Small increments every pay period for several years can add up and often business owners donít catch this until several thousand dollars are missing. Another way that employees can defraud the businesses they work for through payroll is by using payroll remittances to defraud their company. How that works says part-time CFO is when the employee calculates all of the source deductions, and then adds a bit extra on top of that to their own deductions. When tax time comes around, CRA discovers that there source deductions have been overpaid and they simply re-issue a check for the difference. Unfortunately for the business, the check goes directly to the employee who cashes the check and pockets the money. These are two common payroll fraud scenarios, that can be easily eliminated by having two people run payroll, or simply outsourcing it to 1/3 party provider.
Another way that companies get defrauded is when their accounts payable staff create illegitimate payments to dummy corporations. They create a payment to corporation that doesnít exist, cash the check themselves, and when the business owner reviews the payments, sees that the payment appears to be going to a legitimate business. business owners need to be very vigilant when they are reviewing payments, that even though the company looks legitimate, if something isnít quite right about the payment investigates. But even better than having to be vigilant when reviewing finances, part-time CFO recommends that a business owner gets two people working on accounts payable at a time, or that they can outsource it to completely minimize fraud risk.
Once business owners know all the various ways that their business is at risk for fraud, they can start to minimize those risks in their business.
