Enquiring when hiring
Before hiring, spend time conducting reference and background checks. Thorough investigation of criminal records and prior employer references can significantly reduce an organisation’s exposure to fraud.
Segregation of duties
Separating the key financial duties of an organisation is crucial to maintaining good internal control and is often the most difficult thing for small businesses to implement. If one person has the authority to carry out multiple functions, there are no restrictions on what they can authorise (and to whom). For example, staff that have access to bank accounts should not be authorised signatories for an organisation.
Verify all customers and suppliers
Regularly review your accounts receivables and payables to look for new or irregular suppliers or customers. Try to verify customers and suppliers against an external source, such as the Companies Office.
Regularly review financial reports
Regular preparation and review of management reports can give you the oversight you need to detect any abnormalities in a timely manner. Reviewing your financial statements will allow you to gain a feel for your business and means you are more likely to identify when things aren’t right.
If you feel you need assistance with introducing or maintaining internal controls in your business, make sure you ask your local BDO office for help in order to ensure you are fully equipped to handle fraud within your organisation and protect your bottom line.
Other article in this edition:
- Changes to the residential tenancies act
- New or exiting shareholder?
- Can I contribute to KiwiSaver if I'm self-employed?
- 8 actions to improve your business
- FLOW