Bookkeepers Can Steal From My Business!? Warning Signs and Prevention

They say trust has to be earned. Well, how can one earn trust when they are newly hired on to handle all of your business financials? If your trust has ever been taken advantage of, then I am sure you are very weary of hiring anyone to handle such an important task for your business. I’d like to help ease some nerves by sharing with you ways you can identify if a bookkeeper is not being truthful and provide a detailed list of questions to ask before hiring to ensure you work with the best person that you and your business needs!

Embezzlement, theft, fraud…whatever term you choose to call it is NOT something you want to worry about when it comes to any aspect of your business. Unfortunately, small and medium size businesses are most at risk for such criminal behavior. As a small business owner, it is crucial that you have a good understanding of what the warning signs for this crime looks like.

NOTICEABLE CHARACTERISTICS

Behavior Change

If your bookkeeper is suddenly acting “off” or different than their usual, this could point to them engaging in fraudulent behavior. This could look like their mental state is all over the place, they start taking more phone calls or breaks, or they begin working excessive hours. If this is the only thing you are noticing with your bookkeeper, don’t run with it. Stressors in their personal life may have an affect on their professional life. BUT! If you are noticing this with some of the next few to be mentioned, this is definitely something to keep your eye on!

Financial Stress

It is common for those that engage is fraudulent behavior to have some sort of stress in their life. A big stressor that contributes to committing a crime to obtain money would be that of debt. I’m not referring to the usual student loan debt or maybe a couple hundred in credit card. I’m talking about large and possible sudden debts where one may see no other way out that could be a result of addiction or overspending.

Desiring Control in Your Business

If your bookkeeper is being persistent on the idea that they should have full control of all the financial management, this could certainly be a red flag. PRO TIP! Have separation of duties. Don’t make it too easy for them by letting them have full control.

PREVENTION

So, you know the warning signs to watch out for if you find yourself in this position. Great! Now, what can you do to avoid or prevent this from happening in the first place? I’m glad you asked!

Separation of Duties

I’ve already touched on this so there is no need to spend much time on it. To reiterate, separation of duties is very helpful in making sure you do not make it to easy for any one person to steal from you. Make sure that each individual has a clear and defined outline of exactly what their duties are. For example, one is in charge of reconciling accounts while another is in charge of payroll and so on.

Know Your Numbers

Stay on top of what the financials look like for your business! Never hand someone access to your accounts, giving them free reign. Be involved in the processes and be aware of what goes on. Those that engage in embezzlement will most likely begin with taking small amounts of cash because they believe you won’t notice it. If you know your numbers like the back of your hand, you’ll see those small amounts and can squash it before it even starts!

Ask About Their Security Measures

If security is your top concern, then it should definitely be a top question! If they have a hard time answering or seem to have a willy-nilly process, move on and look elsewhere. At AdminBooks, we occasionally have people ask us how we ensure security and we are more than happy to share that we run background checks on all employees, we use logins with passwords and two step authentication, we do view only access to bank accounts, and we run regular computer checks to ensure updates and security are always intact. Why are we so happy to dive into the fun topic of security? Well, because it brings peace of mind and any professional you hire should have your peace of mind as a priority!

Be Cautious of Who You Hire

When you hire an employee, you probably held an interview for them in which you asked a series of questions. Following interviews, you narrowed down your list of potential hires by those that had the greatest experience, knowledge and personality fit for you business. DO THE SAME FOR YOU BOOKKEEPER! I cannot stress enough how important and beneficial it is to ask the right questions for anyone you may hire to cover such an important part of your business! If they have issues with answering your questions, then maybe that’s a red flag for you. If you need help coming up with important, detailed questions to ask before hiring, please click the link below for our free list that we believe can be very helpful in determining not only who would be a good fit but who could be trustworthy.