Everyone in business has a trusted assistant—someone you hire for the job or someone through working together. As you progress in your business, you rely increasingly on that person. Their responsibilities increase, and they put you at ease when under stress by reducing the kayos of the day. 

Caution beware that you do not circumvent the internal controls of your company. Continue to receive the mail for the day and emails that verify invoices sent and the receipt of money in your bank account. Review reports of weekly income and expenditures and also the use of credit cards. Require receipts for credit card expenditures and have them scanned to match the credit card statement. Review the credit card statement and receipts and attach the documents to the payment in your accounting software. 

Always sign checks yourself and avoid delegating your assistant to sign your name. If the assistant is tempted to print and sign your name, the bank may not catch it. Although the bank is liable for the fraud, they may require you to file a police report. The bank is required to reimburse the customer, but still “the bank may not be liable if it accepted the check in good faith and the customer’s failure to exercise ordinary care substantially contributed to the alteration or forgery.” ^[1]

For credit cards, beware of the number of credit cards used in the business. Always review the statements and question unfamiliar charges, including Amazon Market Place, meals, software, podcast, and publications. Also, when terminating a cardholder, take personal possession of the card and cancel it. 

Case Study:  An employee left employment and gave her credit card to an administrator. A few months later, the administrator had personal problems, took a long weekend with her children, and used the firm’s card. Since she paid the firm’s credit card bills monthly via ACH, no one questioned her actions for two years and $90,000 later. She also had not reconciled the firm's bank accounts for six months. Her activities were revealed when the reconciliation revealed multiple credit card payments. She was fired and reported to the police.  

In business, as in life, “Trust but Verify.” By doing so, keep your assistant and other employees honest and your money under proper control by verifying that everyone is working properly for the good of the firm.  

Sage Investigations, LLC has over 50 years of experience in private investigation, forensic accounting, and Expert witnesses. Contact Chief Investigator Edmond Martin of Sage Investigations, LLC at 512-659-3179 or email him at edmartin@sageinvestigations.com for a free consultation. Let his 26 years as an IRS Special Agent and 21 years of Private Investigation work benefit you and your clients. We look forward to hearing from you and building a solid relationship you can count on. Click to read about the Sage Team and their CVs

[1] Office of the Comptroller of Currency - https://www.helpwithmybank.gov/help-topics/fraud-scams/forgery/check-forgery- negligence.html#:~:text=Banks%20are%20generally%20required%20to,is%20entitled%20to%20a%20reimbursement.&text=the%20customer's%20failure%20to%20exercise,to%20an%20alteration%20or%20forgery.