Part-time CFO | Small Business Fraud Risks
Often business owners only have one person that is in charge of their accounting says part-time CFO. This is a huge risk that businesses take on in their business unnecessarily. By only having one person in charge of that information, there is no double check system, and business owners suddenly realize after weeks or months that money is going missing. 50% of all businesses go out of business within five years and 29% of these failed businesses say that running out of cash was the reason why their business failed. As many reasons why business owners may run out of cash in their business, but fraudulent reasons shouldnít be one of them and is completely avoidable.
There are many things that a business owner can do within their business in order to mitigate the risks of fraud within their small business, and one of the most important ways they can avoid that risk instantly is by not having only one person working on any financial task. Part time CFO says it can be very simple for a small business to either outsource their finances, in order to avoid having only one person working on that information, or they can ensure that two staff members always have eyes on that financial information.
There other ways that business owners can fall victim to fraud within their small businesses part-time CFO, and by removing petty cash from their business is when quick and easy way can minimize that risk. Since most transactions with businesses have been electronically anyway, thereís no reason why business owners need to keep cash on hand in their business. A great way to avoid this is to get company bank cards. Business owners can get a protected and locked card with a limit on it to give to their staff instead of using petty cash. Not only does this protect business owners from fraud, it also protects the business owner from the risk of getting audited that can happen when the use petty cash.
Another way that small businesses can easily be defrauded is if there is one person that works on payroll. Business owners can either have two people work on it, or they can pay an external payroll company to handle this very easily. Itís a good idea for business owners to outsource this especially if itís difficult for them to have two people on this task. One person working on payroll can easily defrauded company, part time CFO recommends that a business owner can completely minimize this risk by having an external company do payroll.
Business owners who wish to minimize fraud risks within their business immediately can do several things within their business to completely eliminate the risk of fraud in some circumstances and significantly minimize it in others. All you have to do is be vigilant and aware and ensure that two people of the finances and that they outsource anything they are able to outsource.
Business owners can easily minimize fraud risks within their small business says part-time CFO, all they have to do is ensure they have two people working on any financial files and payroll, or outsource financial tasks whenever possible. Since 50% of all businesses close the doors to their business within five years, and 29% of those failed businesses will cite that they ran out of cash as a reason their business failed, business fraud is one of the more preventable reasons why businesses might run out of cash in their business. There are several things that a business owner can do to eliminate the risk of falling victim to fraud
One of the first things that business owners can do on a regular basis to ensure that they are minimizing the risk of fraud, and that is having a quick meeting with their accountant team each month. Part-time CFO recommends that business owners have this necessary check-in with their accountant in order to discuss anything thatís pressing, for the accountant to ask the business owner important questions as well as to allow the business owner an opportunity to ask the accountant questions they might have as well.
Another way that small businesses can easily be defrauded is through credit card fraud. One of the ways that business owners can avoid being defrauded with credit cards is to not have them. A better option than credit cards is a bank card. Business owners can get bank cards with limited limits that are protected and locked. If there is a limit of even $500 on it, if an employee will is still that money, a business owner is out only $500 instead of thousands. If employees legitimately need a credit card, then get them their own card and ensure that they do not share the credentials. If something happens a business owner knows who is responsible for that fraudulent activity, however if a group company card exists says part-time CFO, then it is extremely hard for a business owner to figure out who did the fraudulent charge. Itís much better for business owner to have a company debit card without online capabilities the limits that employees can use when they need to buy something for the business.
Business owners can also use an electronic fund processor assets schedule to produce fraud risk says part time CFO. And the reason for that is it can help business owners minimize how many payments are coming out of their bank account so often. They can change all their cash disbursements to one week or even twice a month. Itís much easier to manage and itís even easier to catch mistakes or fraudulent payments. Itís an easy and simple process that can is significant difference to business owners seeing the cash flow in their business.
By implementing some simple strategies within their business, business owners can easily minimize and completely mitigate any fraud risks that may happen in their business. Part-time CFO says business owners just have to know a few tools to completely put their mind at ease.