Bookkeepers and Embezzlement - the Value of Knowing Your Numbers!
You’ve got a stack of customer invoices to create and bills to pay, all sitting patiently on your desk waiting for your attention. You dread this time of the month because numbers are just not your thing. You hate how long it takes to get the paperwork taken care of, and you don’t understand the results your bookkeeper gives you. It just looks like a list of numbers on a page that has no relation to the activities you’ve completed during the month.
And then you hear in the news that a bookkeeper is going to jail for embezzling funds from a small business, a government agency or non-profit organization. Great. Just Great. Just recently, a former bookkeeper for Arizona Conference of Police and Sheriffs was sentenced to 3 years in jail for stealing $195,000. Another bookkeeper was accused of stealing $525,000 from Pine-Strawberry Water Improvement District AND $316,000 from Sunny Mountain Realty. I could go on – there are more cases.
The reality is that as business owners we are vulnerable to the bookkeeper because a) we’ve never taken an accounting class and b) we don’t know our numbers. When we started the business nobody told us we’d have to do things like accounting or sales or marketing. We just wanted to help people, right!? And all the experts in starting up businesses say to outsource the things we don’t want to do. So we listen to those experts and turn over the keys to the castle just to avoid dealing with the accounting ourselves. We have no idea what we’re doing or how to supervise the bookkeeper to make sure he or she is “doing it right”.
The big question is this: how do we protect ourselves from theft and embezzlement? I coach my clients to take an active role in the bookkeeping by meeting monthly with the bookkeeper or accountant, setting up limited access to sensitive accounts, and doing some of the tasks ourselves like writing or signing checks. Don’t wait until it is tax time to start looking at numbers – keep up to date so that you can use the information to make business decisions. And no, the net income is not the same as cash in bank! Just because you have a lot of cash in the bank at the moment does not mean that you have enough to cover all your expenses! I get this question all the time – if you want to know the reason send me an email!
We still have time before the end of the year to look at our financial results and take action if the results are different than what we had hoped for. I’ve decided to reach out to business owners and entrepreneurs who want to take a pro-active approach to protecting themselves against theft by creating this Mastermind program called Financial Statements Made Easy. If you are interested please click on this link and take a look at the content. I’m limiting the participation to 10 people on a first come, first served basis – so don’t delay. https://businessethics1.lpages.co/fsme-90-day-mastermind/