Small businesses have no room for fraud. It can slowly drain money from a small business until tens of thousands of dollars are lost. This happens without anyone realizing it. Nothing will sink a small business faster than fraud. Luckily, accountants can work to help you avoid this problem. First, it’s important that small business owners are aware of the most prevalent types of fraud out there. Propel Your Accounting is here to talk about some of the most common fraud schemes in small business and how we can help.
Watch for These Fraud Schemes Targeting Small Businesses
One of the reasons that small businesses are an easy target for fraud is due to the fact that they have fewer employees and fewer checks and balances in place. Here are some of the most common fraud schemes small businesses will see:
– Check Tampering: If you have given employees check writing authorization, they may forge signatures, alter payees, or issue checks that haven’t been authorized. This is a problem when dual signatures aren’t required.
– Skimming Cash: Another common type of fraud for small businesses is cash skimming before that money is record into accounting software. Over time, this money will add up to thousands.
– Billing Schemes: Another problem to be aware of is someone creating fictitious vendors or inflating legitimate invoices. They will look legit and will often go unnoticed because on the surface, it appears as though business as usual is taking place.
– Payroll Fraud: There may be ghost employees created, pay increases that haven’t been authorized, or even falsified time sheets that can result in payroll fraud. Sometimes, there may even be checks cut to staff who have been terminated already.
– Expense Reimbursement: You may have employees who are inflating expenses, submitting personal expenses as business expenses, and submitting fake or altered receipts.
How Accountants Can Help Safeguard Your Business Against Fraud
When you’re working with a certified accountant, it can help you avoid fraud.
– Established Internal Controls: Your accountant will establish internal controls that will ensure no single employee is granted access to the entire financial process. There are checks and balances put in place.
– Transaction Monitoring: You can rely on accountants to reconcile bank accounts, credit cards and general ledger balances as they look for any discrepancies that are suspicious.
– Independent Oversight & Review: Rather than relying on trust, you can turn to an accountant to verify transactions. This can keep long-time employees honest.
– Fraud-Resistant Processes: There are several processes put in place including verifying vendors, confirming payroll accuracy, and cash handling procedures to protect your business.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are concerned about fraud for your small business, you can turn to Propel Your Accounting for the assistance you need in keeping everyone honest. We will take care of your financial statements, tax preparation, and handle the checks and balances that will ensure you aren’t losing money to fraud. Call us today!
