When things go wrong, it is often because we took something for granted or did not communicate our expectations. Some issues are minor, but some are major. In this article we discuss ways to avoid the major mistakes.
If you have ever been the victim of fraud or embezzlement, think back to those circumstances. What happened and how did the person initially get away with it?
Usually, it starts with someone you trust. You give them the responsibility to perform a duty you do not have time to do. Maybe they are an accountant or bookkeeper. It could be the person working with inventory in the warehouse. Maybe they are a cashier or a teller.
The position is immaterial. What is relevant is they had the means, the opportunity and the intent to embezzle from you.
Think about how these nefarious actions were eventually discovered. Maybe a coworker noticed something unusual and reported it. Some thefts are discovered by a routine inventory check. Sometimes an unexplained cash flow issue triggers an internal audit.
It does not matter what initiated the discovery. The problem was discovered after you inspected it. The important lesson is to inspect what you expect. I will say it again: Inspect what you expect.
If you expect the accounting to be done accurately, you need to inspect it. If you expect inventory to be there until it is sold, you need to inspect it. If you expect your money to be deposited into your account, you need to inspect that.
Develop systems and processes to periodically inspect important aspects of your business. Do not blindly trust anyone unconditionally, no matter how much you trust them. The biggest defalcations are usually committed by people you trust the most.
What areas of your business do you need to start inspecting?
