One of the biggest challenges for any small business is appropriately separating financial duties due to the small number of employees. Frequently in a small office, one employee might be responsible for most of the accounting activities including:
- Invoicing
- Paying bills
- Making deposits
- Reconciling the bank statements
- Entering, paying, and reconciling credit cards
- Preparing monthly financial reports
This gives that one employee tremendous control and opens the door for theft and embezzlement. Often, that employee's activities can be difficult to detect until much has been stolen. We recommend at a minimum that the following duties are separated:
- The person paying the bills is not the one signing checks.
- Bank statements are reconciled by a separate person or an outside resource from the individual handling the bills and books.
For many of our clients, we reconcile the bank and credit card statements to provide the necessary oversight function. This allows us to spot problems as well as ensure that the books accurately reflect the bank and credit card activity. Another option is to have an outside review or audit of the bank reconciliations completed by an internal employee. Additionally, some clients choose to outsource their bill payment function to us to separate that duty from their employees. For questions or a complimentary consultation, please contact: Carolyn Murray at 972-378-7787 or
carolyn@jones-square.com
