Your accounting service provider is in a position of trust - he or she works with the finances of your company. Ideally, your bookkeeper is your trusted advisor, a valuable member of your team who works to help achieve your company's vision and goals. That's why it's disheartening to hear stories about bookkeeping service providers abusing this position of trust.
Here are a few things you can do to help protect your business from embezzlement:
1) Do Your Homework
If someone you know refers a bookkeeper to you, ask how long he or she has worked for them. Financial deception can go on for a very long period of time without the business owner knowing that a problem exists; therefore, look for a candidate who worked for the company for more than a year. Be sure to do a background check as well.
2) Be Involved
If you are doing your own bookkeeping, it will save you a lot of time to hire a bookkeeper or outsourcing to an accounting firm. However, as a business owner, you need to stay involved and oversee the bookkeeper's work. Looking at the financial statements routinely is not enough - it is important to review the details as well. For example, one way that a bookkeeper can embezzle funds is to create a vendor that doesn't exist and pay themselves through the fake vendor. Over time, even small payments will add up to significant loses. Make sure that all accounts (payroll, accounts receivable, and accounts payable) are reconciled every month so that you don't miss any important details.
3) Work with a Firm that Values Security
If you're working with a bookkeeping services firm, make sure you choose one that puts a high premium on your security. Ask the company about its hiring process and whether or not they do background checks. Find out what systems and protocols are in place to prevent fraud. You want to choose a firm that relies on a system of checks and balances. It shouldn't be the case that only one person oversees your business' finances - there should be a team involved checking and overseeing each other's work.
Outsourcing accounting services is an important step for a growing business. It will enable you to put more of your energy into your core business. Just take the time to do your homework when choosing a bookkeeper, stay involved by reviewing the details, and choose an account services firm with secure systems and protocols in place.