Unfortunately, employee fraud happens.
One day we got a call from a business that had been referred to us. They were a growing company with 50+ employees. They needed a new accounting department. It was urgent, they said. Their employee bookkeeper had just quit the last day of the month.
One of her duties was printing the checks for the weekly vendor bill payments. The company’s blank check stock was kept in a locked drawer. Part of the process was that she had to submit the bill payment report to the manager, who held the key to the drawer. The manager would retrieve the exact number of blank checks needed for that week’s check run.
Recently, there had been several paper jams in the printer causing the bookkeeper to ask the Manager for extra blank checks.
After the bookkeeper quit, the bank statement arrived. In reviewing the statement, they discovered that the bookkeeper had been printing checks made payable to herself and forging the principal’s signature. Not too bright, but because of how busy everyone was and how much financial activity this particular business generated, they felt that it very easily could have gone undetected. Fortunately, they found this fraud and traced it back several months. The checks added up to $17,973.53
Fun fact: If this ever happens to you and you catch it, you can 1099 the criminal so that…in addition to whatever other punishment they receive…they also have to pay tax on the amount stolen!
How can you help prevent employee fraud?
One thing you can do to help prevent fraud in your business is ensure you have proper systems and procedures set in place for accounting. Accounting software should be leveraged to help separate duties.
Another thing you can do is ensure imely reconciliations and reviews of financials. While no one likes to think their business could be a victim of a fraud attack, the reality is that could be at risk.
We’d be happy to review your accounting system and provide guidance on where you may have cracks and how to remove those cracks. Schedule a time on our calendar now.
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