Preventing Fraud-- Fake Amounts

How can I keep employees from "fudging" check amounts?

Goldenseal accounting software gives you very good job costing and accounting data, which helps you to run your business more effectively. However, if you have dishonest employees who are responsible for entering your accounting data, there is still some chance they'll take advantage of lapses in your management, and steal from you.

This section covers ways to prevent fraud by employees.

False Check Amounts

A common method employees use to "cover" embezzlement is to data enter checks at one amount, but actually write them for a different amount. For example, they will enter fake invoices to increase a vendor payment in the books, and then write the excess onto their own paycheck. That way, the total amount in your bank account will be correct, even though two specific checks are wrong.

You can prevent that kind of fraud in two ways:

Reconciling

By far the best way to prevent fraud is to have an owner or a trusted employee Reconcile Goldenseal against the bank statement. You should never allow the same person to both write checks, and reconcile them against the bank statement.

If Goldenseal's check amounts don't match the statement amounts, it's definitely time to find out why.

Spot Checking

If you have an employee reconciling, an owner should still spot check Goldenseal against paper records.

You can run the reconcile for one statement a year, call vendors to confirm statement balances, and investigate any other data that might be incorrect.

You can also check the Audit Trail to look for changed transactions, which may be an indication of fraud or incompetence.

Click here for info about fraud by false checks.

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