As a business owner, you have plenty to worry about when it comes to financial matters. In order to keep the doors open, you must maintain a steady profit. You can ill-afford to suffer an unnecessary economic loss due to an employee illicitly taking your funds.
Most employees are honest and wouldn’t consider stealing. Unfortunately, there are those who choose to betray an employer’s trust and dip into the till.
Often, employees who handle a company’s accounting chores have the greatest opportunity to embezzle funds. After all, keeping track of money can be complicated and money can be easily diverted to inappropriate hands or accounts.
One way to monitor the manner in which your cash assets are being handled is to perform a monthly bank account reconciliation. So how does the reconciliation work? Here are some parts of the process:
- Review all bank statements, making sure that the checks were issued in sequence.
- Look over all canceled checks. Make sure the checks were paid to recognizable parties and the funds went for business-related purposes. Also, all signatures, endorsements and authorizations should be appropriate.
- Have the reconciliation performed by a party who is independent of other company accounting activities. You could also have a supervisory review of the reconciliation.
It is also important to keep a record of the reconciliation, which can be done with a form or by dating and signing the bank statement that was examined.
Keeping careful oversight of your cash flow can help you thwart embezzlement. But should you ever discover that an employee has absconded with company funds, you may want to contact a Florida business torts attorney. The attorney could offer advice and guidance on how you may recoup your losses and what legal steps may be taken against the offending employee.