Is your bookkeeper stealing from you? Do you have doubts? If you are still reading, maybe you are just curious. Or maybe...
All too often, I hear the story of the business that got swindled out of a lot of money by their bookkeeper. My first thoughts are usually: How? And why? Here is my advice on how to make sure your bookkeeper is not stealing from you.
- Find the right person: Take some time interviewing potential candidates for your bookkeeping position. Check their references to see what type of person they are, not only professionally but personally as well. I would also suggest doing a background check on them. They will be dealing with sensitive financial information, so you want an honest professional.
- Limit your bookkeeper's access and make sure you have checks and balances in place. A bookkeeper should not have the ability to sign checks, make bank withdrawals, use bill pay, etc. Those are managerial tasks that, as a business owner, you should not delegate. Have your financial tasks spread out across at least two parties, yourself included. Do not let a bookkeeper enter bills and then cut and sign checks. Those are poor bookkeeping procedures and they leave your business vulnerable to theft.
- Offer some incentive: If your bookkeeper is "in on the action," they will be less likely to steal from you. If you are happy with your bookkeeper, offer them some sort of profit share or bonus incentive. Even if it's low, something is better than nothing. This way, they will be working with you to make your company as profitable as possible.
- Audit your bookkeeper: I call this one the old flipperoo; turn the tables on your bookkeeper and audit them. This can be very subtle and can be as easy as constantly staying involved. By asking to see copies of invoices and receipts, it shows you are involved and "watching" the books. Randomly ask your bookkeeper to bring you all petty cash receipts and make sure they can explain all of them. By staying involved with the day to day bookkeeping activities, the less likely your bookkeeper is to even think of trying to steal from you.
It seems to me that a bookkeeper would only steal from an employer if they felt left out, or unfairly compensated. By involving your bookkeeper in the business, you may reduce their desire to steal from you. Also, the only way to make sure that your bookkeeper is not stealing from you is to have the right bookkeeping procedures in place with proper checks and balances. By staying involved in the day-to-day bookkeeping, you will demonstrate that it may be difficult to sneak something by you.
Has anyone stolen from you? Want to talk about better bookkeeping procedures?
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