A quick Google search will turn up dozens of articles on bookkeeping fraud and the red flags warnings to watch for in order to protect your business. But while bookkeeping fraud is a grave offence that can seriously affect your bottom line, in reality, it isn’t overly prevalent. Sure, there are stories of the dishonest bookkeeper that skims a little money off the top by writing double cheques but it’s not actually the sort of thing that happens all that often.

But as a business owner, don’t rest easy with that knowledge just yet. A bookkeeper may not be maliciously committing fraud, but the books may not be status quo either.

It behooves an owner/manager to be vigilant about analyzing and understanding the numbers being presented — and to insist on numbers being presented on a regular basis. Because a bookkeeper may be doing you a terrible disservice through sloppy work or sheer incompetence. And how will you know if your bookkeeper is months behind on your records or even entering items correctly if you’re not paying attention?

Insist on receiving regular financial reporting. A good bookkeeper should produce monthly balance sheets and income statements for you to review. If you’re not receiving them, find out why. It could be a sign that your bookkeeper is not keeping your books up-to-date. 

Review credit card and bank reconciliations often.  This is easy to do as online banking makes it quick and painless to check account activity at any given time. By reviewing these statements often, you can personally check whether all of the transactions line up with your expectations. If something is amiss, ask, and make sure you receive a satisfactory response. Missing or out-of order cheques, unknown payment recipients or odd expenses should all raise flags that your bookkeeper isn’t keeping up as you expect.

There is a lot of value in hiring someone to do your bookkeeping (rather than attempting to do it all yourself) but it can be costly to clean up after poor bookkeeping, especially if months, or even years, go by before you notice the errors in your bookkeeper’s ways.

Your bookkeeper’s primary job is data entry. And that data provides the basis for understanding the big picture of your business’s overall health, which will take you beyond bookkeeping and arm you with a solid business tool.  

 

Share this

Latest Insights

Recent posts from our blog

How to plan for seasonal variances in your cash flow

Have you noticed unexpected seasonal variances in your company’s cash flow? If your business is seasonally-based (a lawn care or snow removal company, for example), it’s normal for your cash flow to vary depending on the time of year. Unfortunately, many companies who shouldn’t be affected by the seasons still experience peaks and valleys in […]

Organizational growth and restructuring: Is your business ready to take the next steps?

Are you planning to take your business to the next level? Before you start growing your company, you need to ensure that your organizational structure is prepped for this major shift. Don’t just jump in head first – make sure you follow our key prep tips to keep your growth sustainable and successful.   3 […]

Do you have a file you need to send to us? Would you like to make a payement?