Do You Really Know Who Touches Your Books?

Do you really know who touches your books? Do you really know the people that work for you?  Too often I have had clients come to me for advice when a trusted employee has taken advantage of them.  At times it has been money, other times it has been equipment or clients.  You can never be too careful but you can always be too trusting.  Telling yourself that you “want to believe in people” is fine; just make sure you remind yourself of that when you discover your trusted employee just embezzled thousands of dollars from you. Trust me, it pays to be diligent and observant.

You have worked very hard to create your business so do not let someone in who will destroy it.  There are steps that all smart and successful business owners take to ensure that their business is protected.  Temptation will always be there so limit the opportunity and the ability to steal from you.

First, you should complete background checks on any potential employees (or owners) that you want to extend an offer to.  There are numerous businesses and private investigators that can run a check and give you an answer within 48 hours.  The cost and time will be worth it and you should do it for all potential hires.  It only takes one person and one time to teach you this lesson.

Second, do not automatically and instantly give a new employee access to the bank accounts and checks, even if you hire them for accounting.  Make them earn your trust by showing their ability and loyalty. 

Third, never have just one person in charge of issuing checks for payroll or for expenses, or accepting checks for accounts receivable.  There should always be a checks and balance.  In all the criminal cases I have been involved with where businesses have lost thousands of dollars, one of the common elements is that only one person was in charge of the checks.  Require that there be two signatures on every check that is over $200.00.  Also, try to set up direct deposits or wire transfers for any accounts receivable. 

Fourth, be diligent.  You, as the owner, need to be diligent regarding your business records and bank statements.  Keep your records locked up and in a safe place.  A lot of information can be obtained from these records and the experienced thieves can use the information to get what they want including duplicate ATM cards and duplicate checks.  In fact, you should be the first person to review all bank statements and information from your bank. 

Instruct your employees to bring all communications from your bank to you UNOPENED.  That way, you can be sure you were the first or the only person who reviewed the information.  I suggest signing up for on line banking so you can review this information on line.  Remember to keep your password protected since a thief can clean you out if they get access to your online banking accounts.

Fifth, continue to run periodic background checks.  Someone may have been “clean” when you first ran the check but now be up on charges or have lawsuits.  Medical problems, divorce and substance abuse can instantly change a trust worthy employee into a desperate person struggling to get by.

Sixth, ask your employees to participate in, or institute a drug testing procedure and policy.  After more than a decade in the criminal law field, I believe that the majority of crimes are centered around drug use.  Users often need to commit other crimes to get money to pay for their drugs. Some say drug use is a victimless crime, however, addicts often cannot lead “normal, productive” lives so they have to lie, cheat and steal to get their next fix.

Seventh, be overly cautious with friends and family members.  I know that this sounds cold but you have heard the saying that “we always hurt the ones we love.”  Just because they are family or friends does not mean they will not take advantage of you.  They can have the same problems mentioned above and believe that you would never turn them in.  Being diligent helps not only your business, but could save a friendship and a family.

You might read this blog and think “it won’t happen to me, I have good employees.”  Take it from someone who has seen too many of these types of cases to count, yes, it can and will happen to you.  Do it for your business and for your family, protect what is yours and do not be a victim.

Author Profile
monica k. lindstrom
Monica K. Lindstrom
Monica has had a diverse and successful legal career, which has led her to focus her practice on mediation. She has made the shift from zealously advocating for her clients to compassionately helping others resolve their disputes.

Leave a Comment