Small businesses are particularly vulnerable to employee theft and embezzlement because of generally lax internal controls. According to Marquet International’s 2011 report, the most common embezzlement scheme involved the issuance of forged or unauthorized company checks. The report also revealed that nearly three-quarters of the incidents studied were committed by employees who held finance/bookkeeping and accounting positions.
What can small business owners do to prevent embezzlement in their business?
Pre-Screen new employees
One of the best ways to prevent to employee theft is to ensure that all new employees are carefully pre-screened. In addition to conducting a background and credit check on new employees, small business owners should make a point of speaking to former employers.
Make vacations mandatory
Employees who are tasked with handling cash or accounting duties should be required to take vacations. During this time, the owner or another employee can take over the responsibilities of the employee on vacation. This increases the potential of uncovering any fraudulent behavior.
If you are opening a business in North Carolina and plan to have employees, you must register for a North Carolina Withholding Tax Identification Number. You can do this by completing Form NC-BR and submitting it electronically or mailing it to:
N.C. Department of Revenue
Post Office Box 25000
Raleigh
27640
Form NC-BR is a business registration application that covers income tax withholding, sales and use tax, machinery, equipment and manufacturing fuel tax. All taxpayers required to register for any of these taxes can do so by submitting Form NC-BR. Applicants that register online will receive their account numbers instantly.
A major challenge for bookkeepers, accountants and tax professionals has always been finding a workable solution for sharing a client’s Quickbooks company file. There are a few options, namely:
- Physically exchanging the file
- Emailing or using a portal
- Accessing the file remotely
- Using an accountant’s copy
Each of these methods has its own disadvantages and limitations. The company file may be too large to email. Accessing the file remotely can only be done with Quickbooks Premier and only one user can take control over one remote computer. It requires a user to be physically present at each computer in order to setup a session. Physically exchanging the file is a time consuming and inconvenient. Using an Accountant Copy is just as frustrating. The process of exporting and importing the Accountant Copy is labor intensive and the risk of the file becoming corrupt is relatively high.
