According to a Washington Times Article from late last year, a bookkeeper pleaded guilty to stealing $200,000 from a painting business owner from Buffalo, New York. Officials say he forged checks and did unauthorized bank transfers to himself over a 1 year period.
How can you prevent this from happening in your painting business?
You can protect yourself by establishing internal controls in your painting business. Here’s a list of 4 action items you need to consider implementing into your operations:
1. Sign checks yourself. Period. No one else should do this. If you are interested in going paperless, you can sign checks electronically using Bill.com. You can have your bookkeeper input invoices, but you need to be the one who authorizes payment.
2. If you use paper checks, keep them locked away. No one should have access except you. It is possible to fabricate a check even without your check stock. Don't make it easier than it needs to be.
3. Do background checks on new employees. Especially employees who work in your office. Someone with credit problems is a red flag and could cause issues for you. If they can’t manage their own money, can they manage yours?
4. Have bank statements, either paper or electronic, sent directly to you. This will allow you to review and check for discrepancies.
There are a number of ways employees can steal from you. However, you can mitigate much of the risk by implementing the simple precautions above.
About the Author
Daniel Honan is a bookkeeper and tax accountant who is also a former painting business owner and military officer. With his painting and accounting experience, he is uniquely positioned to help painting contractors save time, money, and resources.