Part-Time CFO

The reality is that fraud does exist in today's business environment, with potentially devastating effects. Uncovering and unwinding fraudulent activities in a company's financial accounting department can be very difficult and many times the business owner will not recoup their losses. How can a small business owner prevent and/or detect fraud? How can fraud be prevented in circumstances where one person is responsible for the finances? How can a business owner safeguard the company's assets?

There are a few steps that business owners can take to reduce the risk of fraud:

Lock your valuables such as check stock, cash, signature stamps, and physical inventory.
Segregate accounting duties such as check writing and signing, receiving and counting inventory, and depositing checks and reconciling the bank statements. If this isn't possible with your current staff, you might consider a part-time cfo, controller or bookkeeper to segregate the duties.
Review third party back-up when authorizing transactions, such as reviewing original invoices before signing accounts payable checks.
Perform background checks and/or check references on all employees and prepare performance reviews to monitor the employees activities.

Unfortunately fraud will always exist in the business world, but with the right business strategy the risk of fraud can be greatly reduced.