We’ve written before about how small businesses are disproportionately vulnerable to fraud. It’s hard for a lot of business owners to believe. After all, the very nature of a small business means that you’re surrounded with a limited number of people with whom you probably have relatively close connections and lots of interaction. Your employees aren’t faceless numbers; they’re part of your daily life. And yet, the statistics speak for themselves.
We strongly recommend that you implement rock solid fraud prevention and detection strategies. (We can help you do this.)
And yet, deliberate fraud isn’t the only reason you should be cautious about the numbers.
People make mistakes. Software has glitches. Stuff goes wrong. If you’re blindly accepting the numbers you see every week, month, quarter, or year (or, worse, if you’re not regularly reviewing those numbers), you could be missing major errors. Maybe it’ll be a one-off error, like a misplaced decimal. Maybe they’ll go undetected for a while. Maybe you won’t find out about them until the IRS comes knocking down your door at tax time.
We don’t want to make you paranoid; we simply want you to operate with an abundance of caution: Hire trustworthy, capable people. Have a strong fraud prevention and detection plan in place. Empower and trust those around you, but verify anyway. Does that mean you need to double and triple-check every number you see? Of course not. Nobody has time for that. But a good accounting team can provide layers of verification and accountability through strong reporting processes and meticulous oversight. And the buck ultimately stops with you, so make sure you are in the loop. If you don’t feel like you have the right system, processes, or team in place, take action now. We can help.