Every so often when speaking with a potential new client about their bookkeeping needs, they mention adding me to their accounts so I can pay the bills for them. I thank them for their trust in me, but state that I will not take on signing privileges or accept full access to their bank accounts. I take pride in being an honest, ethical, trustworthy bookkeeper and person, and as such believe that having that kind of access takes away some of the benefits of hiring an outsourced bookkeeper.
Over the years I’ve worked with a few business owners who had given over such access to a bookkeeper or employee and found themselves the victims of fraud, thousands of dollars were misappropriated. I was brought in to clean up the accounts after the fact. These business owners were guilty of nothing more than placing too much trust and access in the hands of someone who wasn’t able to resist temptation when personal circumstances got difficult.
So how do you protect yourself and your business, while still growing and delegating? There is always going to be risk involved, but you can mitigate it by taking a very simple step.
STAY INFORMED. If you are going to give someone in your company authorization to sign checks, access to a company credit card, and/or the ability to transfer funds, make sure you continue to know what is going on in your accounts. I’m not saying you need to do your own bookkeeping, but there are ways to remain knowledgeable about what is going on with your books and your money.
- At least once a week, go online and check your accounts. Look at the monies coming in and going out. Does everything make sense? Ask questions. When employees know that you are paying attention they are less likely to succumb to temptation.
- Open your bank statements when they come in. Don’t let the person who is writing & signing the checks reconcile to the statement without you looking at it first. If you don’t see and/or sign a lot of the checks issued in your business, make sure your bank statement includes copies of the processed checks. It may cost you an extra couple of dollars per month, but it is worth it to know that your checks are being issued properly.
- Check with your bank to see if you can limit the dollar amount a signer is allowed to authorize. Do the same with the credit card company if you have given a company card to an employee. Setting maximum dollar limits can limit temptation.
- Use online bill pay through your bank, and set up the employee to be able to create payments but only you can authorize them to be sent.
- Have an outsourced bookkeeper or bookkeeping firm do the monthly reconciliation and financial statements. They have no emotional stake in the accounts, and can look them with a completely professional eye. A professional bookkeeper will spot trends, pick up on changes in cash flow that haven’t already been talked about, and will question charges and withdrawals that seem “off” or unusual. Like with #1, knowing there is oversight, will prevent most people from giving into temptation. And if an employee does give into temptation, it will be caught quickly and the damage can be minimized.
Implementing these few checks and balances will ensure that your money is going where you want it to, that transactions are being entered correctly, and that you are making decisions that will move your company forward.
Today is December 1st, and here in New England that means snow and ice are just around the corner. And we aren’t the only ones, about half of the country, if they haven’t had any already are preparing for it. Over the last few years, we’ve had snow &/or ice storms that have taken down power for days and for some over a week. That poses a problem when you’re running a business. No power = No business. And even with power, if you have employees, the snow & ice can keep them home. Or you could be stranded somewhere else, not able to fly or drive home.
But what about those in the southern half of the country? No snow, no need to worry right? Well aside from the hurricanes & tornados, there are also other figurative storms to weather. Servers crash, laptops die, injuries keep you home, etc. There are lots of possible storms to prepare for.
But there are ways to prepare for the inevitable snow storm, both the actual ones and the figurative ones.
- HAVE A PLAN. Take a little time and imagine the snow storm of the century that shuts down your area. One day only? You & your business can probably just roll with it. But what if it is for 4 days or 6 or 8? Brainstorm how your business could continue to function. What will you need? What can you do to mitigate the down time? Then convert that into a plan. Write out your plan, and make sure all key players know the plan and how to implement it.
- BACK UP YOUR DATA. For both the big and the little storms, it is so important to have your data backed up. Not just your bookkeeping data, though that is extremely important, but other important data as well. Documents that would take valuable time to recreate, email contacts, important emails that may be needed in the future, should all be backed up regularly as well. Personally I would suggest backing up weekly. Most businesses back up once a month, when they close their month, but think about it…would you rather recreate a week’s worth of information & data, or a month? But, backing up isn’t enough, you then need to take your backup offsite. Backing up to an external hard drive sitting on your desk isn’t going to do you any good if the storm wreaks havoc on your office. Back up to a USB and put it in your briefcase, tote or purse to take home with you. Or, see below and consider the cloud. If you aren’t comfortable with storing your backup in the cloud, use it just for transfer. Upload your back up from your office, and download it to your home pc when you get there.
- CONSIDER THE CLOUD. There are dozens of cloud storage options out there now. Save documents & spreadsheets to the cloud. You will have access from your desktop as well as the ability to access those documents via the web when you’re stuck at home. Or, if we are in the no power scenario, at least you can be sure that that information is safe and secure, no worrying that when the power comes back on, your server or computers will crash. Some of the more popular options include Microsoft OneDrive, Google Docs, & Dropbox. If you are planning to move sensitive or confidential information to the cloud, be sure to research your options carefully.
Remember, not all storms come with a warning. Some, just happen, out of the blue (so to speak). If you have a plan in place, have been taking the steps outlined in your plan, and are prepared, then you and your business can weather the storm.
Need assistance winterizing your business? Fournier Accounting & Bookkeeping Services is happy to help.