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Part-time CFO | How To Avoid Fraud Risks In Small Businesses

Business owners may run out of cash in their business for a variety of reasons says part-time CFO. Running out of cash is one of the top reasons that businesses fail in Canada. However businesses that run out of cash because employees have stolen from them shouldnít be one of those reasons. Especially with how easy it can be for business owners to protect themselves against employee fraud. Once business owners learn of all the different ways that their businesses are at risk, they can and will very easily avoid those risks. Once they have effectively minimize fraud risks in their business, business owners can breathe easy knowing that is one less reason why they may have cash flow problems in their business. By minimizing cash flow problems in their business, business owners are far more likely to succeed in business and grow.

One of the ways that businesses are at risk for from what is through their checks. Many businesses donít even consider this to be a risk, because they think their bank is protecting them from fraud because of the signature. Unfortunately says part-time CFO banks rarely if ever double check snatchers on the checks they receive. Business owners need to treat the checks their business as carefully as they treat their cash, they shouldnít leave those checks lying around whether they are checks made out to those businesses or our blank checks that businesses use to pay their bills. Either way checks should be treated like cash and locked away whenever possible.

Another way that a business owners business is at risk for fraud and they donít even know it is by having a petty cash fund in their business. Thereís virtually no reason says part-time CFO that any business should be carrying cash anymore. It should go directly into the bank and to be out of temptations wait. Any business that may needs to make purchases throughout the week by staff members, can do so using a debit card. By issue debit card can be much less risk than cash for a lot of reasons. The first reason is business owners can lock that car down so that it can be used to purchase anything on the Internet. The second says part time CFO is that business owners can puts not only a daily limit on the card but a transactional limits as well. If they know there staff can never make purchases over a certain amount and never take out more than a certain amount each day, business owners can be assured that even if fraudulent charge happened on the business card it would be minimal before they found out and eliminated that card. Not only are they eliminating fraud risks by having a company debit card, business owners should also know that by getting rid of the petty cash fund, they eliminate the risk of that petty cash fund being audited in their business.

Many business owners are extremely trusting when they first opened up their business, and have one person in charge of their accounting and financial information says part-time CFO. Business owners may not even understand why this is a risk until it is too late and they have discovered that person has been stealing money from them for years. this isnít a far-fetched scenario, this is something that happens to businesses far too often, and is completely and entirely avoidable. His many things that business owner can do in their business in order to completely eliminate some fraud risks in their business, and significantly minimize fraud risks in other areas of their business. Thereís no reason why a business owner should have to risk their hard earned money with employees who are looking to increase their wealth through illegal means.

One of the ways that business owners can get defrauded is through the employee who is looking after their payroll says part time CFO. Many business owners may not even consider that there is a risk when they task that employee with payroll duties. One of the most common ways that employees can commit payroll fraud is extremely easy, all they do is inflate the number of hours they are owed money for, or the increase the wage hour but they get paid. They get paid extra money, and if they do this over several years, it can be quite effective in stealing a significant amount of money over a long period of time. If those increments are small enough in the beginning, business owners may not even notice it until itís far too late.

Another way that employees can defraud business owners through payroll is by using payroll remittances says part-time CFO. This is a lot more difficult to catch – the employee will calculate the amount of source deductions that need to be paid to the CRA, and then add an additional lump-sum to. They add it onto their own name, when it comes to tax time, CRA will see that the employee has paid far too much money in taxes, and write them a check for the difference. The check was to the employee and not the business allowing the employee to cash the check and get away with stealing money from the company. These payroll frauds are extremely easy to avoid says part-time CFO, by either having two people work on payroll at the same time and if thatís not feasible for business, they should outsourced that payroll to a third party processing company. itís extremely cost-effective as well as being 100% effective for eliminating payroll fraud within their business. But how simple the solution can be an effective it is at eliminating fraud in a business, business owners should immediately mitigate this risk in their business as soon as possible. By eliminating that risk in the company, business owners can ensure that can save employee wages by re-tasking that finance person to a different job, as well as knowing they will not have money stolen from them.