CPA Baton Rouge | Avoid Becoming a Victim of Employee Embezzlement

Let’s face it: as a business owner, you have the ultimate level of responsibility. Juggling the demands of clients, overseeing your team, and monitoring financial transactions can be overwhelming. That’s why putting safeguards and internal controls in place is vital in helping you avoid employee embezzlement. While it may be hard to imagine, employee embezzlement is more common than most realize. It is, however, preventable. Here are some tips to get you started.

Know Who You’re Hiring
It’s not enough to select a new employee based on their resume or personality. Your new hire will likely be handling confidential information, so anyone whom you consider bringing on board should undergo a professional background check. You should also request references, including contact information from previous employers. 

Learn as Much as (and More Than) Your Employees
Over time, employees may see which clients pay with cash, who writes checks, the average daily and weekly deposit amounts, and how much money comes in from outside sources. This is information you should be familiar with as well. Require that each employee log these details in your accounting software and ask your accountant to help you create a program that includes a check and balance system with daily opening and closing reports. That way, either you or your accountant can run and analyze these reports.

Delegate Shared Responsibilities
No individual in your office should control any financial process from start to finish. Make sure you establish and implement a team approach to these tasks. This will let you know who recorded which transactions and create a higher degree of accountability among your team members.

Look for Common Red Flags

You should always keep an eye out for common indicators that an employee might be stealing from the business. Pay attention if someone on your team is suddenly spending beyond their means or is overly protective or secretive of their work. Employees who keep handwritten logs or use personal notebooks, should be transparent about their record keeping.

Schedule an Outside Audit

Serious financial damage can add up quickly if you’re the victim of embezzlement.  It’s important to have a professional review your financials.  He or she will be able to monitor your employees’ work to catch errors, mistakes and indications of theft.

If you notice that the numbers in your business aren’t adding up, talk to a trusted CPA first so they can put a fool-proof process in place to work through any irregularities and get your money back in your business where it belongs. If you have any questions or would like to schedule an appointment to learn more, contact us at Apple Guerin Company today.

Apple Guerin Company LLC
Phone: (255) 767-1020
Url: https://appleguerin.com/
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808