A guest post by Vicki Suiter
“What did I miss?” the owner asked me, disheartened, as we reviewed the report the new controller had just placed in front of us.
The previous controller who had just left the company was considered to be a great asset while there. She made great contributions during her tenure – improved reporting, better systems that allowed for better communication, and saved thousands of dollars in insurance costs per year. But what they discovered in the 30 days following her departure was completely unexpected.
Within two weeks of the new controller starting, numerous issues began to surface. Government reports had not been filed, payroll taxes short paid, and licenses suspended to name a few. As the alarms went off and suspicion rose, the owner started digging deeper with the question in mind “where else has she not been getting her job done; what else was she lying about?” As the search unfolded, they did indeed find more issues and a misappropriation of funds. The sense of disappointment at this breach of trust and feeling of betrayal mounted daily. They were devastated. How could this have happened? What had they not been paying attention?
The answer was simple… insufficient controls. Having controls in place, and a system of checks and balances would have eliminated these problems all together. Here are some of the systems the owners have put into place to prevent this from every happening again:
- Credit cards must be paid by a check, and are no longer paid on line with a transfer
- Payroll transfers are done by the owner only now, and with payroll reports in front of him to substantiate the amount of the transfer.
- All government notices that come in the mail are directed to the owner prior to being opened.
- Quarterly payroll reports/payment and bank reconciliations are reviewed and verified by a third party outside of the company
Maybe these suggestions as well as this article “How to Spot Accounting Fraud” can prevent this from happening to you. Clarity about what’s going on in your business can give you the confidence and peace of mind to know you can trust your accounting staff.
About the author: Vicki Suiter, of Suiter Business Builders helps people SEE their businesses differently, then gives them the tools to DO things differently. Since beginning her business in 1990 as a business coach and consultant, Vicki has helped hundreds of companies achieve the kind of success they never dreamed possible.
Today, in addition to consulting, Vicki is an in-demand speaker at industry conferences nationally and internationally, Vicki’s articles and opinions have been widely shared in print and across the web. She is also the author of forthcoming book “The Simple Truths of Business” Your key to amazing success.