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All of the risks that business owners face while operating their small business says part-time CFO, fraud does not need to be one of them. There are several ways that business owners can protect themselves against fraud either greatly reduce risks of being defrauded in their company, or completely eliminate those risks and others. There are several things that business owner can consider when they are minimizing fraud in their company.
Why is having only one person assigned to a financial task a significant risk? The reason is says part-time CFO is by only having one person who working on a financial task is that there will be no double check system to ensure that that employee is being honest. Businesses should ensure that any time there is financial tasks being done, that two people are working on the task at all times. Many small business owners believe that they do not have the manpower to be able to afford this kind of doubling up, whoever thereís many ways that businesses can outsource those tasks easily and completely eliminate those fraud risks. A business owner needs to consider what is more important, saving that money on keeping that task in-house, or guarding themselves against fraud. Losing money to fraudulent activities will be much more expensive for business and the long term.
Why do business owners need a meeting with their accounting team each month? Although many business owners believe they are too busy to regularly meet with that accountant, itís extremely important in order to build have a conversation, and answer any burning questions the business owner has, and for the consultant to ask necessary questions in order for them to get the answers they need in order to work on a business owners financials. Often, this meeting is where a business owner as he Can compare notes and catch any suspicious activities early. The meeting doesnít needs to be long, even just 15 minutes and is an important check system for businesses.
What type of access levels can be set up at the bank to reduce a business owners fraud risk? Business owners can arrange with their bank to have different banking access levels. Anyone working on financial tasks can have what is called read-only access says part time CFO. This allows the employee to see all banking activities, but makes it unable for them to disperse cash. This way, business owners can have health working on their financials, but know that that person will never be able to do fraudulent payment activities on their account.
By being vigilant, business owners can guard against several ways that employees can commit fraud says part-time CFO. Either by assigning two people to a task, or outsourcing when necessary, even business owners who are reluctant to pay that additional money would agree that itís much cheaper to have two people working on a task or pay 1/3 party to do it instead of getting money stolen from them over a long period of time.
Business owners when they start up and especially when their small often only have one person in charge of financial duties. They either donít know or donít believe that any of their employees would be capable of committing fraud, and they believe they donít have the resources in place to protect themselves. However, fraud risk in small businesses is a very significant risk, but it can be very easily either lowered or avoided altogether. By answering these questions, business owners can get educated on all the different ways that they can protect themselves.
What is better for a company to use when their staff needs to make payments, company credit cards or company debit cards? Part-time CFO says company debit cards are a much better option for business owners because they can lock those cards so online purchases canít be made, and also set a daily limit on transactions. This card can be shared amongst employees of the business, in the business owner can be assured that if someone does make a fraudulent purchase, their only stealing hundreds of dollars and not much more. A company credit card is less desirable, but if a employee definitely does need the credit card, a business owner should get one credit card per employee and ensure that the are in charge of those credentials that they donít share it with anyone. That places part-time CFO if an employee does make fraudulent purchases, it was very easy to track who made the fraudulent purchase.
How do people use dummy corporations to defraud company? This one is a lot more devious says part time CFO. And accounts payable person creates a fraudulent payment, and sends it to a corporation that doesnít exist. They pocket the money, and in the business owner reviews that payment, we will see what appears to be a legitimate payment. Business owners can easily avoid this risk by having two people work on accounts payable, or by reviewing all charges themselves. Business owners should know that even if payment looks legitimate, if it doesnít match their records they should be on guard.
How easy is it for the people who look after payroll to inflate earnings? Part-time CFO says this is an extremely easy way for pay will be able to defraud companies. They either inflate their wage per hour, or inflate the number of hours they worked. Often employees who defraud companies in this way will steal little bits of money over extremely long amounts of time. If left unchecked, businesses can discover that tens of thousands of dollars if not more were stolen from the company over many many years. Business owners can avoid this risk by having two people work on payroll at a time, or by simply outsourcing that task to 1/3 party provider. While business owners may think that they are not able to pay for third-party payroll companies, Iím sure they would agree that itís much easier to pay that company then be defrauded thousands of dollars.
