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So many things that theyíre thinking about and bring about, that often fraud risks from within their own business is not one of those things says part-time CFO. Unfortunately fraud risk is a significant threat to small businesses, and by learning what they are at risk for, can help business owners avoid those risks in their business and avoid the potential of losing money to fraud. It can be a lot easier and a lot more cost-effective than many business owners believe, and by answering a series of questions, business owners can learn how to protect themselves.
Business owners may wonder why having only one person assigned to financial task is a significant risk. Part-time CFO says the reason why thatís a huge risk is because without having a double check system in place, can make it very easy for one employee to defraud their company. Not all employees are dishonest, but the system will ensure that dishonest employees are kept honest. If there employees already honest, and what it does is protect them from making mistakes as well as protects them from being accused of fraud. Business owners you have a double check system in place can but there employees mind at ease as well as their own.
Another question that business owners need to consider in their business is due banks check the signatures on checks? The answer to the question is unfortunately no. Many business owners are extremely surprised to learn that banks do not check the signatures on checks that they receive. If they ever do, itís because theyíve been alerted to the fact that someone has already perpetuated fraud says part-time CFO. By treating their checks with the same do cater as they treat their cash, businesses can avoid someone using their checks fraudulently.
How does using electronic fund processer on a set schedule reduce fraud risk? Part-time CFO says this is an extremely effective way of handling the payments. Not only can eliminate fraud risk, but it can help businesses be a lot more organized with their payments. How it works is a business owner sets up with the electronic fund processer on a set schedule, and then organizes any payments that need to come out to come up through that processor on time. This eliminates the amount of transactions that are coming out of the account itself and can organize them by schedule so that business owners can easily see when charges came out how much if they need to double check or review anything.
The next question is is petty cash present a fraud risk, and how can business owners use a debit card to avoid it? Part-time CFO says there is no reason at all. Cash needs to exist in the business anymore. Not only is it a fraud risk from employees stealing the money, but itís also a audit risk. They can completely eliminate the risk of petty cash by using debit cards.
entrepreneurs often only have one person working in their finance department either with accounting, payroll or accounts payable. There is a significant risk to this says part-time CFO, and if business owners are aware of all of the risks associated with that will be able to not only engage in less risky behaviour, it will also build eliminates completely certain fraud risks from within their business. Business owners should want to protect their cash flow at all times, and this is a really effective way of doing just that.
By only having one person assigned to financial task is huge risks as part-time CFO because it will be nothing preventing that employee from committing fraud in the business. There are several different ways that employees can commit fraud that business owners may not even know about, so ensuring that thereís always two people working on financial files can help ensure the business owner is protected at all times.
One of the ways that employees running payroll can defraud the company is simply by inflating their earnings. Part-time CFO says this is one of the most common ways employees have defrauded their company. All they do is increase their wages per hour by a bit, or they increase the number of hours theyíre going to get paid that pay period. By stealing tiny bits of money over a long period of time, place and get away with fraud very easily if there is no double check system. If business owners know how easy it was for employees to perpetuate this depth fraud, they would definitely ensure that there is two people on payroll, or send out to a third party payroll processor.
Another way that employees can defraud the business that the core is through payroll remittance fraud. The way this one works, says part-time CFO is when an employee calculates the source deductions that need to be paid by the CRA. That employee will give the CRA a lump-sum to will also add additional funds onto that lump-sum onto their account. When it comes to tax return season, CRA will say that too much money has been paid in taxes and will issue that employee a refund for the overpay. Unfortunately the money comes back to that employee and not the business, and they keep the money. This is a way that they can steal money from the business and businesses donít even know what. The only way that a business owner can guard against this is by calculating the amount of source deductions that need to be paid by hand and then comparing it to the lump-sum that was paid.
Business owners can also guard against this by ensuring that either two people are working on payroll at a time, or that they outsource their payroll to a third-party company. Once the company is looking after their payroll, the risk of fraud is completely zero.
