As an owner you can proactively protect your interests by instituting proven financial controls.
Taking control, step by step.
The first step to protecting your finances is to adjust your mindset. Implement process-based systems, not people-based ones.
Institute cash controls. With so many businesses forced to implement work-from-home procedures, more employees than ever are operating online. Review your systems and put in place barriers (e.g., passwords and PINs) to ensure that only those who should have access actually do, such as the person you have designated to pay bills.
Create segregation of duties. The employee responsible for releasing any funds, such as the person designated to pay bills in the example above, should also not record, monitor and approve those transactions. Of course, some small businesses may find this arrangement impractical. If yours is one of those, then you need to insert yourself into the process somehow. Insist that all invoices go through you.
Do the month-end closing and review. It is vital to perform reconciliations of all accounts and supporting documents and to conduct a thorough review of your finances at regular intervals.
Document all business processes. Developing company policies and procedures sets the expectation that employees are expected to abide by certain protocols. This is especially important when it comes to finance.
Secure all documents in the cloud. Paper is your enemy. Moving all your accounting to the cloud offers greater security and also enables separation of duties by allowing remote access to more than one person (including you).
Introduce external audits. Perhaps nothing serves as a greater deterrent to employee fraud than the idea of an audit. If you have never conducted one, do it as soon as possible. Again, it’s all about setting expectations.
