In 2014, an estimated 1-2 million people were targets of identity theft and fraud, and these crimes have grown exponentially in the last 3 years. When businesses are victimized, the embezzler or thief could be your most trusted and reliable associate or employee. While it's impossible to stop all theft, here are some ideas on how to stop internal fraud and embezzlement.
First, it’s up to you to know and understand your own numbers. I don’t care who handles the books for you, you are the CEO and it’s up to you to monitor results. An entrepreneur must always be aware of the business's finances.
Segregation of duties is essential to avoid being a target. Just as the government runs on a system of checks and balances, so should your company. Some suggestions include limiting the number of people who can sign checks besides you. The person signing any checks should not be the same person who receives the bank statements in the mail.
It’s also smart to request that your bank return cancelled checks or send copies of cancelled checks with the statements. Make sure you (or someone you trust) is reviewing these monthly.
The most successful business owners also do the following: monitor payroll by employee; limit access to petty cash; reconcile cash at the beginning and end of shifts; and limit online access to bank and or credit card accounts.
One entrepreneur we worked with even used his home address as the mailing address for his business. This way, he could monitor everything going in and out of the company, at least by mail.
Speaking of mail, you must be aware that there are networks of illegitimate companies seeking to steal useful information from taxpayers and business owners. So of course, there is a constant barrage of offers on how to solve problems and raise revenue.
Some are just meant to scare you into giving up your personal information.
If you receive a suspicious letter, notice or form via paper mail or fax from an individual claiming to be from the IRS, go to the IRS home page and run a search on the letter, notice, or form number.
Fraudsters often modify legitimate IRS letters. You can also find information at Understanding Your Notice or Letter or by searching Forms and Pubs. If it is legitimate, you'll find instructions on how to respond or complete the form.
If you don't find information on the IRS website or the instructions are different from what you were told to do in the letter, notice or form, call 1-800-829-1040 to determine if it’s legitimate. If it's not legitimate, report the incident to TIGTA and to the IRS at firstname.lastname@example.org.