Main Street Wednesday – Who has Access to the Money?
August 6, 2014
By Bob Coleman
Editor, Coleman Report
One of my professors in my MBA program suddenly stopped his lecture in mid-sentence and slowly stared at the class. Going completely off-topic he said, “I don’t care how big your company is, NEVER, NEVER, NEVER let someone else sign your business’ checks. Once you go public fine, but until then make sure you control your own cash!”
These prophetic words come back to me every now and then when I read stories of small business owners losing hundreds of thousands of dollars to fraud by their own employees.
Kristen Brady had been employed by a Louisiana oilfield equipment rental company as its bookkeeper for 12 years. In her last two years, she ripped off the company for over $250,000. Kristen photoshopped fraudulent invoices then cut a check to herself as petty cash. She forged the owner’s signature on over 200 checks.
Last week, she pled guility to one count of bank fraud. She faces the obligatory 30 years in prison and a $1,000,000 fine.
The takeaway? Consider asking your customers two questions. 1) Who signs on the checking account? 2) Are the statements sent to the owner’s home address or to the accountant?
Could be an interesting discussion.