Part-time CFO | Protecting Against Fraud Risks
Often when business owners start their new business, they are operating on a shoestring budget says part-time CFO. And because of this, they only have one employee working on financial tasks. Many business owners do not understand what a risk this poses to their business. It is an easily avoidable risk, and without guarding themselves against it, can end up costing their business thousands of dollars or more. There are easy ways that business owners can guard against being the victims of fraud in their own business and keep the money that they are working so hard to make in the business where it belongs.
Many business owners donít understand why only having one person assigned to financial duties is a risk. The reason for this is part-time CFO is when there is only one person working on a financial task, they will be able to do dishonest things and know that they will not get caught. That isnít to say that every one who works on finances in a small business is dishonest, but because of that risk, business owners should guard themselves against it. Not only does it protect the business owner against fraudulent activity, it also can help them catch any errors that happen within the business. Even if there is no malice intended, employees that donít have a second person working with them can make mistakes that go unnoticed and create problems for the business owner in the long term. Also business owners should take into consideration that not only does this protect the business but it also protects the people working on those tasks. If thereís two people working on them, chances are either one of them would likely be accused of doing anything dishonest. If business owners are unable to have two people working on financial tasks, another option is outsourcing. Thereís many financial tasks that can easily and affordably outsourced.
Business owners also should be aware that by using electronic fund processors is a simple and easy way to set up payments for their business. Not only does it help eliminate errors, as much easier to do, it can also eliminate fraud. The reason for this is part-time CFO is because it changes the number of cash transactions that happen from a business bank account from several a day to either a couple of week or once every couple of weeks. This is extremely easy for the business owner or a to manage, easier to catch mistakes because this reduces the number of transactions coming out of the account business owners can review the preapproved transactions to make sure that there is no transaction there that is unauthorized.
Entrepreneurs that are aware of all of the various ways that they could fall victim to being defrauded says Part Time CFO, can help them eliminate those risks. Through having multiple people working on finances, to outsourcing to using electronic tools can help the business owner not only guard against fraud, but guard against mistakes and be easier to manage.
Many business owners donít even take into consideration fraud risks when they start their business says part-time CFO, and that can lead to business owners having risky situations in their business and not even know it. There are several things that a business owner can easily do that will eliminate their risk for being defrauded in their own business, they just have to know about all of the different ways that it can happen to them, so that they can make the changes in their business. So many businesses run out of cash in their business and have to end up closing their doors, being a victim of fraud shouldnít be one of them.
Thing that business owners should do to stay on top of their business finances is to have a meeting with their accounting team each month. Many business owners donít know why this is necessary and donít want to give up a lot of their time, but by speaking on a regular basis with their accounting team, not only can it increase their understanding of the business finances says part-time CFO, it can also allow an opportunity for questions to be asked and information to be shared. This openness can help accountants do their job better as well as potentially catch errors or fraud either while itís happening or soon after itís happened. If business owners keep this regular monthly appointment, they can be far less likely to hear that someone has been stealing money from them for years.
Another risky behaviour that businesses have in their business and not even know that itís risky says part-time CFO is they only have one person assigned to financial duties. The reason for this is because while not all employees working in finances are dishonest, not having a double check system doesnít deter dishonest employees from being dishonest. Whenever possible a business owner should have the two staff members working on anything finance related in order to help everybody stay honest. If thatís not an option for businesses to finances, business owners can also outsource many financial tasks that they currently have in their business.
Another way that business owners can minimize or completely eliminate risk of being defrauded is when they do have their staff working on their finances, business owners can limit the access that those employees have to their bank by giving them read-only access. They can see all activity, but they canít make the payments. Itís extremely easy for business owners to set up that access level with their bank, and can put a business owners mind at ease knowing that the employee is working on necessary financial tasks, and yet they will be unable to disperse cash.
By knowing all of the various financial risks that can face them in business, business owners can eliminate the risk of being defrauded from inside their own company.