11 min
Telltale Signs Of Bookkeeping Embezzlement And How To Prevent It Contractor Success Map with Randal DeHart | Contractor Bookkeeping And Accounting Services
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This Podcast Is Episode Number 0391, And It's About Telltale Signs Of Bookkeeping Embezzlement And How To Prevent It Bookkeeping embezzlement stems from a feeling of entitlement and the need to get even. Your bookkeeper or accountant will steal if they feel confident they can get away with it and if circumstances allow for it due to weak integrity and a sense of "Redistributing The Wealth, But Not The Work Or The Responsibility."
It is estimated that the number of bookkeepers caught embezzling from contractors is less than one percent of the total. In most cases, the ones that are caught are rarely convicted because all too often, it is the contractor who has to spend thousands of dollars on forensic accountants and attorneys to prove the theft occurred.
In most cases, it is near impossible to persuade the authorities to prosecute when a contractor bookkeeper embezzles because it is often viewed as a "Victimless Crime."
In most cases, an in-house construction bookkeeper starts with good intentions, and over time they become complacent and jealous of the lifestyle they see the contractor enjoying. Unfortunately, they rarely experience life in construction outside the climate-controlled, clean office with good lighting, real restrooms, beverages, and a relatively quiet environment.
It makes perfect sense for you to delegate all the mind-numbing bookkeeping services tasks as you can. Contractors who want someone to provide Contractor Bookkeeping Services and pay the bills are practically waving a Red Flag and holding a sign that says, I'm stupid, pay my bills and embezzle as much of my money as you want!
When Do Most People Buy A Burglar Alarm? After Being Robbed, Not Before!
Whenever you think it is a good idea to give your in-house bookkeeper or any Outsourced Contractor Bookkeeping Service full unrestricted access on your online bank account, savings account, payroll account, or credit card so they can save you time by paying your bills - take two aspirin and lay down for a nap, when you wake up and still feel it is a good idea, think again and review these telltale signs:
Your bookkeeper...
- asks for signature authority on your checking/savings/payroll accounts
- has a lifestyle that seems above what they are earning
- takes Records Home to work on, or they want to work in the office when no one is around (Fraudulent activities are easier when nobody is around)
- refuses to take a vacation
- has access to your credit/debit cards
- receives mail-order packages at work
- tries to explain delinquencies tax notices
- misplaces payroll receipts, deposit records, supplier letters, and estimates
- has QuickBooks in a complete mess, and you cannot understand any of it
- is the primary contact for your company's banks, auditors, creditors, etc. (gets angry when you ask for a QuickBooks report)
- tries to blame the previous bookkeeper or outside accounting firm for messy QuickBooks
- gets defensive when you or your CPA asks questions
- makes the bank deposits, and they seem to be too small
- does not get along well with other employees and staff members.
- suggests they could save money by getting rid of the outside accounting firm
There are more warning signs, but it's more important to be aware of the actions you can take:
You (the owner) signs all checks
- Nobody else ever signs any checks. It is okay if your bookkeeper prints the checks; just make sure the owner signs them. Three separate checking accounts
- One for your main operating funds, one for payroll with just over enough to clear all outstanding payroll checks, and one for the owner's debit card purchases. You input the PIN
- For all payroll or payroll tax deposits. Letting your bookkeeper be responsible for payroll or payroll tax deposits is like giving them keys to the kingdom and saying, "Take whatever you want." No company credit cards
- Let employees be reimbursed for company expenses. Every employee needs time off
-
This Podcast Is Episode Number 0391, And It's About Telltale Signs Of Bookkeeping Embezzlement And How To Prevent It Bookkeeping embezzlement stems from a feeling of entitlement and the need to get even. Your bookkeeper or accountant will steal if they feel confident they can get away with it and if circumstances allow for it due to weak integrity and a sense of "Redistributing The Wealth, But Not The Work Or The Responsibility."
It is estimated that the number of bookkeepers caught embezzling from contractors is less than one percent of the total. In most cases, the ones that are caught are rarely convicted because all too often, it is the contractor who has to spend thousands of dollars on forensic accountants and attorneys to prove the theft occurred.
In most cases, it is near impossible to persuade the authorities to prosecute when a contractor bookkeeper embezzles because it is often viewed as a "Victimless Crime."
In most cases, an in-house construction bookkeeper starts with good intentions, and over time they become complacent and jealous of the lifestyle they see the contractor enjoying. Unfortunately, they rarely experience life in construction outside the climate-controlled, clean office with good lighting, real restrooms, beverages, and a relatively quiet environment.
It makes perfect sense for you to delegate all the mind-numbing bookkeeping services tasks as you can. Contractors who want someone to provide Contractor Bookkeeping Services and pay the bills are practically waving a Red Flag and holding a sign that says, I'm stupid, pay my bills and embezzle as much of my money as you want!
When Do Most People Buy A Burglar Alarm? After Being Robbed, Not Before!
Whenever you think it is a good idea to give your in-house bookkeeper or any Outsourced Contractor Bookkeeping Service full unrestricted access on your online bank account, savings account, payroll account, or credit card so they can save you time by paying your bills - take two aspirin and lay down for a nap, when you wake up and still feel it is a good idea, think again and review these telltale signs:
Your bookkeeper...
- asks for signature authority on your checking/savings/payroll accounts
- has a lifestyle that seems above what they are earning
- takes Records Home to work on, or they want to work in the office when no one is around (Fraudulent activities are easier when nobody is around)
- refuses to take a vacation
- has access to your credit/debit cards
- receives mail-order packages at work
- tries to explain delinquencies tax notices
- misplaces payroll receipts, deposit records, supplier letters, and estimates
- has QuickBooks in a complete mess, and you cannot understand any of it
- is the primary contact for your company's banks, auditors, creditors, etc. (gets angry when you ask for a QuickBooks report)
- tries to blame the previous bookkeeper or outside accounting firm for messy QuickBooks
- gets defensive when you or your CPA asks questions
- makes the bank deposits, and they seem to be too small
- does not get along well with other employees and staff members.
- suggests they could save money by getting rid of the outside accounting firm
There are more warning signs, but it's more important to be aware of the actions you can take:
You (the owner) signs all checks
- Nobody else ever signs any checks. It is okay if your bookkeeper prints the checks; just make sure the owner signs them. Three separate checking accounts
- One for your main operating funds, one for payroll with just over enough to clear all outstanding payroll checks, and one for the owner's debit card purchases. You input the PIN
- For all payroll or payroll tax deposits. Letting your bookkeeper be responsible for payroll or payroll tax deposits is like giving them keys to the kingdom and saying, "Take whatever you want." No company credit cards
- Let employees be reimbursed for company expenses. Every employee needs time off
-
11 min