Protect Your Business Against Employee Fraud

Employee theft is surprisingly common and can devastate your business. Consequently, it is worthwhile to put an anti-theft program into place, which includes internal auditing and monitoring. By following a few Do's and Don'ts you can minimize the risk of employee fraud.

THE DO's

• DO regularly review your financial statements.

• DO deposit your cash and checks daily.

• DO secure your blank checks and signature stamps.

• DO carefully monitor a new employee who is responsible for buying goods.

• DO periodically have an individual hand out payroll checks and confirm that absent employees are actual employees.

• DO periodically compare payroll payees with employee records.

• DO regularly review bank reconciliations.

• DO distribute responsibilities among employees so that a different employee collects receipts, makes out deposit slips, reviews bank statements and writes checks.

• DO periodically open your own mail and compare payments received with deposits.

• DO periodically hire an outside accountant to audit your books.

• DO require two signatures on checks over a certain amount.

• DO review billing error complaints from customers.

• DO require that original invoices be kept in the files.

• DO maintain and monitor a list of your property that is subject to theft.

THE DON'Ts

• DON'T allow accounting personnel to work longer than a year without taking a vacation.

• DON'T sign blank checks.

• DON'T hire employees without checking references.

• DON'T sign checks for new vendors without verifying their name and association with your company.

• DON'T allow transfers between accounts without verification.

• DON'T sign checks without reviewing and canceling paid invoices.

By, FindLaw http://biz.findlaw.com [1]