Articles

Checks and Balances: Keep ’em Honest

In Business on May 24, 2011 by Sufen Wang Tagged: , , , ,

money on the street

Everyone’s asked and been asked this age-old question: If you found money in the street, what would you do? Would you keep it? Try to find the owner? Give it away to somebody else? Burn it as a statement against “The Man?”

This question is supposed to show how honest you are (or aren’t). But even those who are adamant against keeping money found on the street may find themselves tempted when it comes to money found unguarded in the workplace. That’s why, as an employer, it’s a good idea to implement different checks and balances.

By segregating financial responsibilities, you can prevent theft and embezzlement in the workplace. If there’s only one person in charge of all of your accounting tasks, such as making bank deposits, receiving funds, issuing checks, and reconciling checkbooks, it can be easy and very tempting for that person to skim a little off the top for themselves. By assigning different people to different tasks, you ensure that they can keep one another accountable and honest.

krusty the klown

There's a better solution than this.

If you don’t have enough accounting resources to be able to segregate responsibilities, then you should, at the very least, check the books regularly and make sure that your accounting person knows that you’re doing it. Here are a few ways for you to keep an eye on your finances:

  • Maintain a small petty cash fund for the office and reconcile it every week.
  • Review your credit card and bank statements regularly.
  • Take advantages of online services to keep tabs on your business finances.
  • Implementing checks and balances in your business will not only protect your business from theft and embezzlement, but it will also protect your employees from the temptation to act against their better judgment. In the end, they’ll thank you for it.

    On the Money,
    Sufen Wang
    Wang Solutions

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