Wednesday, July 30, 2014

Protect Your Business Against Theft/Embezzlement in the 21st Century

Protect Your Business Against Theft/Embezzlement in the 21st Century

Thieves come in the middle of the night to avoid being seen. Likewise white collar thieves target business that are not watching. Theft and embezzlement is a growing problem. So watch your business and make sure employees know you are watching.

The face of theft has changed.  Inside a business the fear was someone would forge checks or steal money that should have been deposited.  Today many bills are paid electronically.  So how do you protect yourself against your bookkeeper sending unauthorized payments to herself or to a friend or family member.


  1. Do background checks when hiring a bookkeeper or make sure the company you contract with does and is insured.
  2. Provide the bookkeeper a list of approved bills to be paid
  3. Compare payments often to your approved payments list and check both the amount and the payee. This can be done often with online access to your account.
  4. Make sure you get the bank statement sent to you and again carefully check amounts and payees.
  5. Keep your operating account lean.  The account your bookkeeper is authorized to make payments out of should have just enough to cover payments for a short period of time.  Keep all excess cash in an account only you can access.
  6. Regularly review your financial statements comparing them to the prior period, the prior year, and the budget.  The budget is especially important if your business activity is not consistent from period to period.
  7. Regularly and carefully review your Accounts Payable and Accounts Receivable and watch for unusual amounts and names.
These are some suggestions for protecting yourself against unauthorized payments.  You will also need controls in place for deposits and other checks written which are topics for another post. Lastly, review your procedures often and change them as the process for paying bills change.

The CPA Superhero wants to help you to succeed in business, life, and in retirement.  While my main business is preparing tax returns, I also work with clients to setup accounting systems to start, manage and develop their business(es) and develop and implement a financial plan. Contact me using my information below to schedule a free introductory consultation up to a half hour. 

Jeff Haywood, CPA

The CPA Superhero

Follow the CPA Superhero on Twitter too at:

My posts contain general information that does not fit every situation, they are not all inclusive, and as always for your tax situation everything "depends on facts and circumstances."  In addition, the information/IRS requirements are always subject to change.  So call me to talk about your specific facts and circumstances and what you want to accomplish.