Bookkeepers Can Help Stop Fraud In Its Tracks

CPA Australia says employee fraud is more common than most businesses think, and when it goes by unnoticed for an extended period, it can lead to business failure and the destruction of careers.

What exactly is fraud?

Fraud covers assets misuse, fake accounting, theft and corruption and it involves an offender, a victim and ultimately an absence of safeguards. It is this absence of safeguards that provide the opportunity for an employee to carry out fraud, regardless of what their personal motivations may be.

How can I prevent fraud?

Fortunately for businesses, having reliable systems in place will reduce the risk of fraud occurring in the first instance. While fraud cannot be eliminated in its entirety and, is a risk that most employers have to accept, internal controls can be strengthened and amended to minimise fraud from happening.

Divide responsibilities

A bookkeeper is trained to spot any anomalies. However, there are many things that a business can do from within to further reduce the risk. Not having only one person responsible for a transaction from start to finish and having clearly defined responsibilities for all employees is a great start.

Review reports regularly

A bookkeeper can produce monthly reports which can be viewed by the manager. These reports will help ensure that any discrepancies are caught early on in the process. A bookkeeper can also stop situations from escalating into a more serious issue. The financial health of any business should be worth the time and effort it takes to view the reports, no matter how busy a manager may be.

Formalise all procedures

Many small to medium businesses don’t have the proper procedures in places, and often things don’t get recorded as they should. A bookkeeper can advise on what is needed to be done to strengthen the financial systems and guarantee the necessary checks are in place. Being unorganised or lackadaisical in your approach will only help those looking for a way to beat the system.

Watch bank accounts

It may sound silly, but if you have your eye trained on reports, you fail to miss what is happening directly on your account. Make sure your physical accounts are checked regularly and monitored for any strange account activity. This is of course made easier thanks to modern online banking technology. If you, or your staff, notice any unknown payment recipients or missing cheques, then follow it up immediately.

Have regular audits

Routine audits should be carried out as a safety net on a regular basis. If you are unsure what to do, speak to your bookkeeper or accountant for advice. It doesn’t pay to become complacent with the way you run your business, no matter how long you have been in operation or how much you think you know. Always follow up on every issue no matter how small it may seem at the time.

If you require advice on your financial systems and what to see what makes us different from other bookkeepers, give us an obligation free call on 02 9699 2880. We have bookkeeping specialists in retail, foreign currency and inventory, and there will always be someone in the office to assist your call.