Oh, and by the Way, the Thief Could be You!
Dear Friends,
This time of year I do some audit work along with my quality assurance and business coaching work. In reflecting upon the diligence my profession has placed in helping organizations avoid fraud, I compiled a couple of checklists for you to use in contemplating how well your business is protected.
Kaye
Oh… and by the way, the thief could be you! Small employers suffer the most when it comes to business fraud. According to the Association of Certified Fraud Examiners, those organizations with fewer than 1000 employees lose an average of $150k per fraud case, while larger ones lose $71k. Some of the explanation for this is, small employers don't have the checks and balances, and/or don't expand the time and money to do a thorough screening process when hiring employees. In a small business, it only takes "one bad apple" to put you out of business. Many times, this is a long-time, trusted employee. Here's some questions you can ask yourself to help protect your company:
Do you set a "Tone at the Top" by being an example and setting a policy for honesty and integrity?
Do you look at all your bank transactions on-line or on a paper statement that you access or receive yourself on a regular basis?
Can you be sure your inventory is all accounted for?
Are there employee/vendor relationships in which collusion might occur?
Do you encourage your customers and employees to report concerns and complaints anonymously to you?
Have you used an outside expert to make sure your customer and financial data is safe and secure?
Do you have a way to know if all purchases are authorized and within budget?
Do you make sure a monthly bank reconciliation is prepared or reviewed by someone other than the bookkeeper?
Can you be certain any cash received can be accounted for?
Is mail opened, checks immediately stamped, FOR DEPOSIT ONLY, copied and deposited by someone other than the bookkeeper?
Are checks signed or electronically transmitted by someone other than the bookkeeper?
Do you require your bookkeeper to take a vacation or rotate duties with another employee?
Do you personally know all the people receiving paychecks?
Do you know all the vendors getting checks?
Are blank checks, customer information, and other assets properly safeguarded at all times?
Do you periodically have an independent review or audit of your processes and controls?
Do you have a process for comparing trends in revenue and expense categories?
This list will do a lot to protect you. But, are you protected from yourself? Consider that, as the imperfect human beings we are, we have the capability to waste a whole lot more money than anyone could ever steal from us. So, here's another list!
How loyal are your customers? Do they go out of their way to say great things about you? Do you have a process to constantly be in touch with your customers?
Do you have processes that deliver the customers what they want and more, each and every time?
Do you have the right business strategy? Have you taken time to develop a vision and strategic plan for your company with input and buy-in from your employees? Do your employees know what's in it for them?
Do you have the right people in the right place?
Do you and/or your leadership team have all the attributes needed to be successful?
Do your employees know you?
Have you taken time to ask your employees what they think about the leadership (that includes you :) ?
Do you have personal, as well as business goals?
Do you have a balance in your life that works and makes you a joy to be around?
Do you know your employees? What are their aspirations? Where are they from? What is the name of their family members? What motivates them?
I hope you find this list to be useful and thought-provoking, and let me know if you think of some other attributes that need to be added!
