Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.
How much do you trust your employees? Do you trust them enough to allow easy access to the company's finances?
It might make you seem like the ideal employer, but it isn't always effective. In fact, it may encourage something destructive to your small business: employee theft. Did you know that it causes 90% of all significant theft losses?
That's a staggering number, especially for a small business. Unfortunately, it's common. Some employees think it's hard for you to track all finances and assets when you're busy. As a result, they feel free to commit crimes like stealing and cause serious financial trouble to your company.
It's alarming, but know that there's a way to stop or prevent it from happening. We encourage you to take advantage of bookkeeping services for small businesses to avoid theft with accurate and updated books! Read more to know how they can help.
Here's How Small Business Bookkeeping Services Can Help You Prevent Employee Theft
Employee theft may be rampant in small businesses, but there are ways to minimize the risk. One way is to make sure you use bookkeeping services for your small business. Here's how accurate and updated books can help secure your company's finances.
Paperless Access: Fewer Chances to Steal
Bookkeeping services today involve accounting and inventory management software. Not only do they make work easier and faster, but also more secure. So instead of storing checks or other documents in a drawer, you can produce digital copies in a cloud-based system.
This means your employees can no longer steal any physical documents. Furthermore, online bookkeeping software features access control, allowing you to give access only to the right people. With a secure online bookkeeping system, you can easily monitor and modify your files.
Red Flag Alert: Immediate Notification of Suspicious Activity
Bookkeepers are responsible for bringing immediate or real-time alerts of changes or suspicious transactions involving your finances. For example, when an employee attempts to create a new vendor account using their personal information, the accounting software will detect it and quickly send an alert.
You may either get a direct notification or a report from your bookkeeper. Once you receive it, investigate the matter and take appropriate action. Additionally, bookkeepers will send monthly reports and reviews of your finances to help you keep track of any discrepancies.
Unbiased Advice: Experts in Spotting Financial Anomalies
It's understandable if you can't fully trust your own skills or internal staff to monitor the employees for any suspicious activities. If that's the case, consider outsourcing financial solutions for an unbiased and trustworthy alternative.
Hire a reputable bookkeeping team to help manage your finances and spot financial anomalies. With their help, you can immediately find out if someone is attempting theft (e.g., overpays themselves or bills your company for products or services they never delivered).
Filling the Gaps: Customizing Software Settings
Your high-tech accounting program can't do everything on its own. No matter how hi-tech it may be, there are still some things you and your bookkeeping team should handle. When you opt for a bookkeeping service, you can benefit from their software expertise; they can customize the settings according to your needs.
These features include user access, cloud storage, content filtering, transaction dashboards, report generation, and other privacy settings. They ensure that you're taking full advantage of the software's best features.
A Second Look: Double-Checking for Accuracy
A bookkeeper's job is to gather your company's financial data and ensure its accuracy. It's not easy to find a small mistake in a pool of numbers, so working with bookkeepers is good for double-checking books. They serve as your second pair of eyes to keep everything intact.
Typically, you'll receive monthly or quarterly reports of the numbers, and you'll be informed if something's missing or inaccurate. So don't worry if you're too busy to look at everything in detail; with reliable bookkeepers in your team, you can still secure your finances and prevent theft.
No to Shrinkage: Track Inventory Closely
You notice some stock listed on your accounting records but are absent in the actual inventory. This is called inventory shrinkage, and employee theft can be one of the reasons behind it. You can work with a bookkeeping team and constantly get up-to-date inventory and COGS lists to prevent such incidents.
In addition, bookkeepers regularly check your stock levels and reconcile them with your sales reports. When you have an updated and accurate inventory list, it'll be easier to spot mistakes and solve them asap.
The Business Owner's Role
Even though you have a reliable bookkeeping team, you should still oversee everything. Otherwise, it will only increase the chances of theft. Here's what you can do as a small business owner.
- Carefully review bank statements, reconciled reports, and transaction records for possible discrepancies.
- Check payroll statements and ensure everyone receives the right amount.
- Don't give signature access to any employee or outsourced accounting team.
- Come up with strategies with your financial team to prevent theft.
- Familiarize yourself with scams to recognize any suspicious attempt right away and secure your finances.
- Conduct regular check-ups on your balance sheets to ensure enough cash for all expenses.
- Require any other necessary, timely financial reports that you may need to secure your finances.
- Communicate effectively with your teams and seek clarification when necessary.
- Don't assign a single person to work on many financial-related tasks. This only encourages theft and human error.
- Take hiring seriously. Check the candidates' backgrounds and ask specific questions when hiring employees or outsourcing a bookkeeping team.
- Encourage your employees to say something. If they're hesitant to report, they should at least help prevent the damage. Don't let them think of employee theft lightly, and educate them about the consequences.
Secure Your Finances With Unloop's Online Bookkeeping Service
Employee theft is not uncommon for small businesses. In fact, it's a huge reason for the failure of many organizations. Sometimes, it's hard to figure out who to trust, but you can still avoid theft with a good bookkeeping team.
Proper bookkeeping can help you keep track of your finances and quickly detect suspicious activities. It can also help you build strategies to minimize the risk of theft and other financial issues.
Are you not well-versed in bookkeeping? No problem; you can hire reputable bookkeeping services for a small business like Unloop! We work with inventory and eCommerce businesses from Canada and the USA and collaborate with trusted accounting firms to assist you in your financial obligations.
We also include the best accounting tools in our bookkeeping packages to ensure financial data security. Furthermore, we strive to communicate effectively to ensure we're on the same page.
You can lower the chances of employee theft with secure platforms and effective communication! Interested in working with Unloop? Book a phone call with us today. Let's talk about achieving clean, accurate, and up-to-date books!