Sign Your Own Checks or Employee Theft! – Employee theft has occurred to several of my client’s businesses over the years. If you own a company and want an employee to steal from you, let me make a suggestion. The best way to encourage employee theft is to give an employee the authority to sign the company checks. Any company under $25 million in sales should not have anyone other than the owner signing checks. There is too much risk to have an employee in the organization signing the business’s checks. The same is true giving the authority to an employee to draw down the company’s line of credit.
Recently, I had a client that the bookkeeper opened a new corporation. She created fraudulent invoices for that entity to her employer and paid the invoices. She could do it because she had the authority to sign the company’s checks. When the monthly bank statement came in the mail, she pulled out the canceled checks to her company. She later destroyed the invoices she paid for her business. Before the owner became aware of the employee theft, she had stolen over $1 million over three years. The owner sued the bookkeeper but never recovered any of the funds.
Sign Your Own Checks or Employee Theft!
It should not take the owner that long to review the backup documents and sign checks. When the owner is the only signatory, it reduces the risk of employee theft. As a result, it also gives the owner the opportunity to become more familiar with all the company’s expenses.
My name is Robert Curry, and I am an Author, CEO Coach, Keynote Speaker, and Turnaround Specialist. Over the past 20 years, I have worked with more than 70 companies taking their businesses from Loses to Profits.
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