The occurrence of business closure is normally caused by many factors but one of the major factors that suckle business investments in embezzlement of funds and resources. It is good to note that the embezzlement of money and resources in Small and Micro Business Enterprises (SMEs) is unpredictable. No one in their sober sense of mind will be open about their under-table squashes from an SME. This means that the owner, entrepreneur or businessman in charge must the cautious, inquisitive and critical in managing every detail of the SME’s business so as to prevent any losses from embezzlement.
According to the 2016 Embezzlement survey that was carried out by HISCOX, a UK based insurance firm, 80% of embezzlements occur in SMEs. Al Walsh, the CEO of Walsh enterprises advised on using the following measures to avoid embezzlement of funds in an SME:
According to the 2016 Embezzlement survey that was carried out by HISCOX, a UK based insurance firm, 80% of embezzlements occur in SMEs. Al Walsh, the CEO of Walsh enterprises advised on using the following measures to avoid embezzlement of funds in an SME:
- Make it a standard rule that bank statements come directly to you as the principal entrepreneur or the owner of the SME sealed. Review the cancelled checks and ask questions. If it comes unsealed, look for missing checks immediately and contact the bank to get the right one so as to monitor what is fishy.
- Always reserve high-value checks signature for yourself or another trusted person.
- Do not use a check stamp for cheque as they are easy to duplicate.
- Give the accountant custody and signature authority on minor cheques that can be processed without using a lot of the SME’s cash.
It is good to trust your accountant employees but as a business owner, take your time to verify every financial detail. Always know that embezzlement of funds for your investment can happen under your watch.
- From time-to-time, have an auditor review your accounts to ensure no funds are lost. Auditing of accounts always helps to seal current flaws and future loopholes for misuse and financial theft in an SME.
- The owner of an SME should more often review the payments, expenditures, purchases, and deposits of cash and goods to ensure that all payments were effected as they were supposed to.
- It is also good to have two or more employees involved in authorization, signing, withdrawal, purchases or payment of services. This will help avoid cases where a single person is fully in charge of financial flows in an SME and can create a system to siphon its resources without anyone noticing.
- It is advisable to process all financial expenditures and revenues of an SME from a bank account. This means that all the bank records in the form of the bank statement and receipts will act as records and evidence of any transaction. In the modern system, banks have mobile systems that allows one to know when some amount of money is deposited into their account and who did that. It also informs those attached to an account when some money is withdrawn, how much, who did the withdrawal and where. This can be able to monitor the expenditure of cash from an SME.
- It is also essential for the owner of an SME to know your customers and suppliers to avoid cases of fake invoicing. The same should apply to employees in a way that will curb fake refunds and overtime payment, theft of SME’s assets and false expenditures.
According to the 2016 Embezzlement survey that was carried out by HISCOX, a UK based insurance firm, 80% of embezzlements occur in SMEs. Al Walsh, the CEO of Walsh enterprises advised on using the following measures to avoid embezzlement of funds in an SME:
- Make it a standard rule that bank statements come directly to you as the principal entrepreneur or the owner of the SME sealed. Review the canceled checks and ask questions. If it comes unsealed, look for missing checks immediately and contact the bank to get the right one so as to monitor what is fishy.
- Always reserve a high-value checks signature for yourself or another trusted person.
- Do not use a check stamp for cheque as they are as easy to duplicate.
- Give the accountant custody and signature authority on the minor cheque that can be processed without using a lot of the SME’s cash.
- It is good to trust your accountant employees but verifies every financial detail. Always know that embezzlement of funds for your investment can happen under your watch.
- From time-to-time, have an auditor review your accounts to ensure no funds are lost. Auditing of accounts always helps to seal current flaws and future loopholes for misuse and financial theft in an SME.
- The owner of an SME should more often review the payments, expenditures, purchases, and deposits of cash and goods to ensure that all payments were effected as they were supposed to.
- It is also good to have two or more employees involved in authorization, signing, withdrawal, purchases or payment of services. This will help avoid cases where a single person is fully in charge of financial flows in an SME and can create a system to siphon its resources without anyone noticing.
- It is advisable to process all financial expenditures and revenues of an SME from a bank account. This means that all the bank records in the form of the bank statement and receipts will act as records and evidence of any transaction. In the modern system, banks have mobile systems that allows one to know when some amount of money is deposited into their account and who did that. It also informs those attached to an account when some money is withdrawn, how much, who did the withdrawal and where. This can be able to monitor the expenditure of cash from an SME.
- It is also essential for the owner of an SME to know your customers and suppliers to avoid cases of fake invoicing. The same should apply to employees in a way that will curb fake refunds and overtime payment, theft of SME’s assets and false expenditures.
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