Not everyone is dishonest, of course, most folks are far fromit, but some people do have sticky fingers and do steal, so becareful who you have working in your business and the check on themperiodically.

As the owner of a business, you probably do not have the time tomonitor all these different areas all at the same time. But if youremployees know that you could monitor a certain area, and often do,they are less likely to try and steal from you.

If they perceive that you are keeping an eye on them and thatthey could be caught at any time, they are less likely to tryanything below board. Sometimes doing just enough to give theimpression you are watching everything is all that is needed.

Here are five things to take into consideration to make sure youaren't being taken advantage of:

Bookkeepers and treasurers

A bookkeeper or treasurer really has nothing more than his orher reputation.

When hiring, ask your colleagues for any referrals they mayhave, and whether you hire from a referral, or not, checkreferences.

The trick to checking references is to make sure that there areno gaps in the resume, so check with each reference to determinethe correct timeline. If there is a gap that cannot be adequatelyexplained, let that be a red flag and move to the nextcandidate.

Remember two things: These folks have access to all theinformation about your business you give them and there are somevery sophisticated ways to steal these days.

Your staff

Those who do not have direct contact with the money in yourbusiness can still steal your time and inventory.

If they are new hires, follow the same steps you would whenhiring anyone new and check references and trust yourinstincts. These days there are also sophisticated backgroundchecks that can be done for all of your potential employees thatinclude their presence on the Internet.

Continue reading …

Do you have a way of tracking your employees' hours? (Photo:iStock)

Safeguarding time

Are your employees working all the hours they say they are? Ifyou aren't using some sort of punch clock, start to. It's still theeasiest and simplest ways for employees to track how many hoursthey are there working.

Whether it's on the wall or on their computer or smart phone,they simply log in, work their day, then log out in the end. Thisworks well even for employees on salary as just a simple way tokeep track of what days they worked.

If appropriate for your business, have employees log their timeby job or task. On a daily or no more than weekly basis,employees track their time, by whose job or which task they wereworking on.

This provides two things: It shows the actual hours by dayof what they worked and it helps manage the hours spent on each jobto show efficiency. Monitoring these reports will help youkeep time in check, so set up a monitoring system that works foryou. Make sure you check in with employees anytime you have aquestion … and even when you don't.

Safeguarding money

Let's review receiving money into your business.

In an ideal world, you would have two people opening the mailand signing off that a check or cash was received and that it wasposted to a customer's account. However, in the real world,where we are doing more work with less employees, you have a coupleof good options.

If you have a lot of payments received in the mail, you can buya lockbox service, where all the payments are sent to a secureaddress and they have the internal controls to process the paymentsand put the funds directly into your account. This servicedoes cost money, but if this sounds like it might work for you,then look into it.

The second option is simpler, yet effective if done properly:Open the mail yourself. Not all of it and not every day, butin the beginning open it several days a week and let everyone knowyou do it. When the mail comes in, mark down what checks comein and then review the next business deposit to make sure it'sthere. If there is an invoice past due, but you thought it waspaid, investigate. A business's mail is full of lots of greatinformation and if your employees know you are monitoring it, youare helping to safeguard your business.

Let's now review money going out of your business. For businessowners, they are usually the only person who has the ability tosign checks, and this works just fine. There are circumstances whenrequiring two signatures on a check is a better idea. If thecompany is large with many different departments, requiring thedouble signature puts into place a control so that not one personhas access to all of the funds without oversight. The othercircumstance when two signatures are prudent is when there is nosingle “business owner” or if an organization has an extrafiduciary responsibility, such as a nonprofit.

Credit card refunds also need to be treated just like checksgoing out. There should be an additional level of approval beforeone can be processed and that can be as simple as having a secondemployee approve the process or as detailed as having you approveeach one.

Lastly, there is no substitute for you, as the business owner,to review the bank statements and credit card statements yourselfevery month. Just like with the mail, if you have questions, askthem and let your staff know you are payingattention.

Safeguarding inventory

Is your company inventory and equipment locked up? Is only oneperson responsible for it? Are there sign outs required? Whathappens to outdated or obsolete inventory?

For inventory, the importance of doing a total inventory countas often as feasible, certainly annually, is imperative. Afterthat, keeping an up-to-date list and doing spot checks periodicallyis very important to safeguarding your assets. Go back into thestock room. Grab an updated list and count some of your items,especially the most popular ones. Maybe you stock high-endelectronics or maybe you stock the latest-desired fashionaccessories. It's your inventory and your money, so check onit.

Finally, many small companies have employees doing many duties,and perhaps have been working for them many years. Look for ways toseparate duties, watch payments come into your business, checkstaff efficiency and make inventory checks. If your staff sees youmake these checks and perceives that you are watching everything,they will think twice.

Michele Johnson and Lorraine Kennedy are partners at StellarSupport Associates, a bookkeeping, CFO services and businessconsulting company in Westport, Conn. They have written a book,“Buildinga Stellar Business: A Structured Guide to FinancialSuccess.”

Related: They're robbing you blind

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