Archive for April 2009
In times of economic turmoil the incidence of fraud and embezzlement increases. You can protect yourself by implementing and enforcing a few simple procedures. These procedures are ones all business should follow regularly but may have been lax in enforcing. Now is the time to tighten up the ship.
- Manually sign all checks. Do not use a signature stamp.
- Only sign a check if it is supported by an invoice, a purchase order or check request explaining the purpose of the disbursement.
- Rotate who opens the bank statement each month and make sure the person who prepares the checks or prepares the billing is not involved. Open the statement as soon as it arrives and look for any odd or suspicious. Call the bank if you are even mildly concerned.
- Have someone not involved with paying vendors or collecting from clients prepare the monthly bank reconciliation. Someone from senior management, if there isn’t a CFO, needs to review the monthly bank reconciliation.
- Review the list of invoices prepared each month to identify any customers you do not recognize. If anything looks odd, call the customer and verify the order.
- Manually approve all electronic transactions. A form similar to a check request can be developed to support the individual transactions.
- Verify all unused checks are accounted for. This is done by periodically flipping through the unissued checks to make sure there is no break in the numeric sequence.
- Keep checks locked-up with as few people as possible having a key or knowing where the key is kept.
- If you experience an unusual and unexplained cash shortage bring in a consultant to investigate.
- If you do find evidence of fraud or embezzlement make sure you prosecute the individual so they don’t become a repeat offender.
A former client suspected one of its senior people was ripping them off by charging things to the corporate credit card. Things that could possibly pertain to the project the person was working on. It went on for years and no one investigated. When they finally acted they determined they were out in excess of the $250,000 they were able to recover.
Concerned that your children and maybe even you don’t know enough about basic personal finance principles? Checkout the Money Savvy Generation, a company established by a private banker who witnessed first hand how adults struggle with personal finance. The Company’s goal through its Money Savvy Kids Basic Personal Finance Curriculum is to “help kids get smarter about money.”
You can further reinforce the learning through “The Millionaire Kids Club” book series. The books are available through Money Savvy Generation and feature four friends with different money personalities.
In early March I had my very first virtual advisory board meeting. I “met” with my three advisors for about 50 minutes. When I recruited them I committed to meetings that were limited to one hour so it was important not to go over.
One week before the meeting I sent out the:
- Dial-in information
- Meeting Agenda which included specific questions I wanted to address
- Reading materials, i.e. my marketing plan, summary of outreach activities and asked that they view my website.
One thing I learned on the day of the meeting is I need to resend the dial-in information. One of the advisors was having computer problems and called me to get it.
Now I understand how my clients feel. The experience was nerveracking. Here were three people I had known for years professionally. I didn’t want to let them down. And facilitating my own meeting didn’t help. Next time I’ll ask if I can record it.
The discussion remain centered around my agenda covering the areas of business development and marketing. Each advisor was generous with their suggestions providing food for thought and tactical solutions or steps to take.
Our next “meeting” will be in early June as I requested a quarterly schedule. Sometime in the next week or so I will email an update of my activities to keep them in the loop. This will be an interesting quarter as I am working on several new initiatives.
