Not everyone is dishonest, most folks are far from it, but some people do steal, and no business owner has the time to monitor everything all the time. If, however, your employees know that you could monitor any area of the business, and if they perceive that you are keeping an eye on them and that they could be caught at any time, they less likely to try something. Sometimes doing just enough to give the impression you are watching everything is all that is needed.Safeguarding Time – Make sure your employees are working all the hours they say they are. Utilize a punch clock. Whether it's on the wall, their computer or their smart phone, they simply log in, work their day, then log out in the end. Use it for employee on salary and hourly. It’s a simple way to keep track of what days they worked and what client or tasks they worked on.
Safeguarding Money – Separate tasks as much as you can when working with incoming money. Make sure whoever is receiving the money and/or payment is different from who is posting it in your accounting system and making the deposits. In small businesses, watch a payment come in yourself and make sure it gets into the next bank deposit. If cash comes into the business, watch for it in the next bank deposit. Do some test runs of your own to check on your staff periodically and inquire about the daily cash deposit on occasion, even if you know it’s correct.
For money going out of your business, make sure you sign all checks or approve all payments before they are sent. For credit card refunds remain just as diligent. There should be an additional level of approval before a refund can be processed, even just having a second employee approve it will help deter misappropriations.
Safeguarding Inventory – Make sure your company inventory and equipment locked up. Make sure only one person responsible for it. Make sure there are procedures in place to sign out inventory and have a procedure for disposing of outdated or obsolete inventory. Spot check your inventory as often as you can, especially the most expense items if your time is limited. come into your business, check staff efficiency and make inventory checks. If your staff sees you do this and perceives that you are watching everything, they may think twice.
Lastly, there is no substitute for you, as the business owner, to review the bank statements and credit card statements yourself every month. Just like with the mail, if you have questions, ask them and let your staff know you are paying attention.
Michele Johnson and Lorraine Kennedy are partners in Stellar Support Associates in Westport, CT. www.stellarsa.com
Stellar Support Associates provides bookkeeping, CFO services and business consulting for many small businesses and individuals in Connecticut and New York, as well as nationwide and internationally.
