Trust Can Be Costly

So you’re a small- to mid-sized business owner working hard to make a profit and grow your business. Your accounting staff consists of a bookkeeper who has been with you for years, and you trust them implicitly to watch over your company's assets. You think your company is too small to have any effective internal controls in place and that implementing controls may offend your bookkeeper: "What, you don’t trust me?"

Welcome to the scenario that has produced staggering statistics regarding corporate fraud and theft.

Developing effective and efficient internal controls, even in a small business, does not have to be about trust, but instead is just plain old sound business practice.

Here are a few really quick and easy things you can do as a business owner or manager to better safeguard the company’s hard-earned assets:

• Have the company’s bank statements come to you unopened. Look at the checks: do the payees, amounts, and endorsements seem right? Are there any unusual transfers that you can’t explain?

• Review the monthly bank reconciliation: are there checks or deposits in transit that have been outstanding for a long time? Why would someone not cash a $1,000 check?

• Regularly review corporate credit card statements.

• Keep your signature stamp secure or get rid of it altogether.

• Make sure that, when you are presented with checks to sign, the invoices always accompany the checks so that you can review them for reasonableness.

• And finally, make sure the same person who is doing your accounting is not opening the mail and making your daily deposits.

These are just a few easy steps you can take to make sure that your hard-earned dollars stay in the company.