Financial fraud is something that will completely kill a small business. Often, when fraud is occurring, it slowly drains the business without anyone realizing it. It isn’t until there is significant loss that many business owners uncover the problem. There is an accelerated risk when a single person is handling the bulk of the finances. When you hire an accountant to work with you, it helps protect your small business from the trouble with fraud. Mark Dicus & Company is here to talk about small business fraud and how accounting services help you avoid it.
Common Examples of Small Business Fraud
When fraud is present, it is done in a sneaky way. The entire purpose for fraud is to ensure it goes unnoticed. In a small business, it is often happening quietly, and it tends to exposure the gaps in oversights and internal controls. Some of the most common examples of small business fraud include:
– Asset Misappropriation: More than 85% of small business fraud happens by way of stealing cash, inventory, equipment, or misusing company credit cards.
– Financial Statement Fraud: Sometimes, accounting records are manipulated to hide fraud. Things often dissent in accounting records include theft, inflated revenue, understated expenses, and a misrepresentation of the financial health of the company to investors, owners and lenders.
– Payroll Fraud: Hours might be stolen on timesheets, ghost employees are created, and unauthorized pay increases can be some of the ways fraud is present in payroll.
– Expense Reimbursement Fraud: Another form of small business fraud often happens because inflated legitimate expenses, fake or altered receipts, and claiming personal costs as business-related expenses are occurring.
How Accounting Services Help Safeguard Your Business from Fraud
There are several ways that accountants can help eliminate the risk of small business fraud by:
– Establishing Internal Controls: Putting some internal controls in place ensures that no one person is in charge of tasks like invoice approval, payment processing, bank reconciliation and payroll changes.
– Transaction Monitoring & Reconciliation: Relying on accountants to perform reconciliation of bank accounts, credit cards, general ledgers and more will help eliminate fraud.
– Independent Oversight & Review: Turning to accountants to provide you with objective oversight can help you verify transactions and ensure long-tenured employees aren’t committing fraud.
– Fraud-Resistant Processes: You can rely on accountants to verify vendors and bank changes, confirm payroll accuracy and employee legitimacy, and implement dual cash handling procedures.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you own a small business, it is important that you work with one of the accountants at Mark Dicus & Company to help ensure there isn’t any fraud taking place. We will make sure you don’t have to worry about losing money through dishonest employees. It is our goal to help you put systems in place that will offer your business the protection it needs. Call us today!