skip to Main Content

How do I know if someone stealing from me?

Did you know that for a small business there is a loss potential of approximately $387,000 from fraudulent disbursements of cash?  What’s even scarier, did you know this happens in 73% of all businesses?

In order to protect yourself as a business owner, here are 11 early warning signs that you should watch out for to protect yourself against cash misappropriation:

  1. a decreasing ratio of cash to credit card sales – if you’ve always had a 50-50 ratio of cash to credit card and all of a sudden recently the percentage has gone 20% cash to 80% credit card the real question should be what’s happening?
  2. increasing accounts receivable compared with cash – if your accounts receivable continues to go up but you’re not actually ever seeing any receipt of that money, where’s that money going?
  3. delayed posting of accounts receivable payments – this can indicate that someone is “borrowing” the cash or payments that are supposed to be offsetting your accounts receivable
  4. credits against individual accounts receivable – this is a part of your system and controls. Unless you have approved of credit, why would there be credits on the account? this could be someone posting credits and taking a portion of the payment into their own pocket.
  5. unexplained cash discrepancies – there are always cases where there’s going to be some sort of discrepancy. You need to decide how much is tolerable, and how frequently these are occurring ( and that that frequency, are they still tolerable)?
  6. altered or forged deposit slips – in my opinion this one is a automatic firing issue. Any alterations or forging could cause considerable damage to your business
  7. customer billing and payment complaints – if you keep hearing from customers that they’ve already paid you on XYZ bill, but your computer system or your accounting department continually says that they have not, the real question is – what is the discrepancy?
  8. increasing soft expenses such as consulting – this is another area where looking at the percentage of profit of your business on a regular basis can help you determine if anything is out of whack from normal
  9. employee home address matches of vendors address – this one should be obvious, but unfortunately sometimes is not. Often will happen is that a spouse or relative will get hired to do a job for a company. In those cases, you need to make sure that only the correct amount of money is going to that address
  10. vendor address is a PO Box or maildrop – this could or could not be an issue. These days many vendors do not want their physical address listed on their bills.  However, it could be something to cause concern if you’ve seen one of the other early warning signs as listed above
  11. excessive voided, missing, or destroyed checks – these are all ways that someone can deposit money into their own account from yours.  What is excessive? It depends on the business, but in my industry, being a CPA, anything more than one quarter causes need for concern.

if you, or someone you know, is running into issues like this at your business please do not hesitate to e-mail or contact me right away so that we can help you prevent any potential fraud.

Back To Top
×Close search