Q: I’ve heard that fraud by employees is common. What steps can I take to avoid this?
Aug 17 2005
Answered by: Peter Done Ask a question
There are some common-sense checks and balances you can put in your business. Always take up verbal references when you employ someone. If you can’t get a verbal reference, don’t offer the job. Keep your chequebook under lock and key in a fireproof safe or safety type box. Only you and one other person, such as the bookkeeper, should have the key. Keep as little as you can in the petty cash box and insist that receipts are provided for any use of the cash. Keep the petty cash box locked in a drawer or cupboard, again with only two people having access to it. Make sure that either you or the bookkeeper reconciles the amount of cash in the box to the receipts once a month. Set up a system of purchase order forms for any goods or services over a certain amount – say £100 or £200. Be very alert to unusual cheques or apparent discrepancies. If you use all these checks and safety precautions, you will make it much harder for employees to steal money from you.
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