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Fraud in the
Workplace
By: Renee
Daggett
Not too long ago, I received a call from
another tax preparer informing me that an employee was caught
stealing. This employee was writing checks to pay her personal bills
and hiding the expenses under a job materials category. It added up
to be thousands of dollars and when I arrived at their office, the police
were there gathering the information to press charges. The owner was
devastated!
Call me naïve, but my mind just doesn’t work
that way. Fraud…how is it that people think of these things in order
to steal? I was told that you have to work hard for what you EARN,
yet the news reports that fraud in small businesses increases each year due
to the increased financial pressures we are in.
 Fraud
occurs when a person has financial pressure and opportunity. Here are
some examples of how employees can attempt to steal:
1. Using a blank check to pay a personal bill
2. Using a signature stamp
3. Creating fake invoices for clients/customers to pay so they can collect
money
4. Pay bills to a fake vendor
5. Altering checks – either the payee or the amount
6. Check washing – actually washing the check and reusing it for personal
gain
7. Setting up a fake business bank account for clients/customers to deposit
funds
8. Using business credit cards to charge personal expenses
9. Processing payroll for fictitious employees
Fraud generates $50 billion dollars
annually. Here are a few things you can do to prevent it from
happening in your business:
1. Separation
of duties: The person that makes the deposits is not
the same person that reconciles the bank account. No single person
can authorize, process and record transactions.
2. Go paperless:
If you don’t have check stock, checks cannot be manipulated.
3. Regular Internal
Audits: Look at check images with signatures
monthly/quarterly/annually. Review invoices for accuracy.
4. Payment Controls:
Limit access to bank accounts; only have one person approve payments.
5. Automate the
Process: Multiple members perform different steps:
data entry, assign to Chart of Accounts, schedule payments, verify
payments, approve payments.
6. Background Checks:
Do employee background checks before hiring; credit history will provide a
glimpse on how he/she will handle business money and/or if he/she is
struggling financially.
7. Recognizing the
Signs: Perpetrators will not take vacations so they
protect and hide their violations. Is there unexplained debt or
missing financials? Is an employee living beyond his/her means?
8. Be Proactive:
A business owner must pay attention and keep their eyes on the
business. Don’t be too busy to review transactions or financial
reports. Let your employees know you are watching.
Don’t be naïve. Understand why and how
people are stealing in the workplace. Set up procedures to minimize
the opportunity. What are you doing to protect your business?
Did You Know?
 •If you are
separating or divorcing your spouse, pay attention to how
the court says your kids are to be deducted on tax returns. The right to
claim the dependents should be listed in the divorce decree.
•If you own a sole proprietorship and are
making good profits, consider incorporating so that you can eliminate the 15.3%
self-employment tax.
•Job
hunting expenses are deductible: newspapers purchased for
employment ads, long distance calls, transportation costs to interviews,
fees for legal or accounting related to employment contracts, career
counseling to improve position in trade, cost of mailing resumes and cost
to recruiters.
Our Featured
Client:
Bikram Yoga Morgan Hill
We
have some fabulous clients that have amazing businesses.
As an added value of working with Admin Books, clients are highlighted in
our newsletters.
See their answers to our interview questions below.
1.
What is your industry?
Yoga, health and wellness.
 2.
What is unique about what your business offers?
Bikram Yoga is scientifically designed for achieving and maintaining
health and balance in your body, mind and spirit and is practiced in a
heated room for 90 minutes. This yoga stretches and strengthens every
muscle, ligament and joint; working every cell of the body, from the inside
out, bones to the skin. It works each system of the body through
contraction and extension and addresses every bodily system including:
digestive, respiratory, circulatory, immune, endocrine, lymphatic,
skeletal, muscular and nervous systems. Bikram Yoga brings the body back to
healthy working order, promotes weight loss, prevents illness and limits
the effects of aging.
 3.
Who is your ideal client?
Bikram Yoga is for EVERYbody. You're never too late, never too old,
never too bad and never too sick to do yoga and start from scratch once
again. It's suitable for beginner to advanced students and all levels of
physical ability.
4.
What is the best business advice you can pass on?
Do what you love, be of service, have faith and persevere. Create
community.
 Success
is doing ordinary things
extraordinarily
well."
~Jim
Rohn, Motivational Speaker
Our Business Corner
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connecting with you,
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Very Nice,Thanks for sharing.
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