Question
Ya know business is good when you can have an employee (chief financial officer) steal $25,000 a week for 7 years without anybody noticing it. I've heard that Quality Woodworks works mostly for the rich and famous. And now they are also famous.
Forum Responses
(Business and Management Forum)
From contributor K:
That's the most expensive advertising campaign I've seen so far.
I know a very hard working guy in another trade who did work for me, three kids in high school/college, working two jobs to get by, etc. His wife worked for a small company and managed to pilfer $400k over several years. He knew nothing. She claimed her pay was cut when the company changed ownership, or some such. She'll almost certainly go to jail, divorce to save what little they can - several ruined lives from any angle you look at it. There's been a rash of these in the news in my area over the last couple years, 8 or 10 at least. I said the same thing: Has to be more to it, right? (Drugs, controlling lover, gambling.) But apparently you can blow a really, really lot of dough when it belongs to someone else and have absolutely nothing to show for it.
If someone steals from my small company, they're stealing directly from my pocket, which is the same as stealing from my family, the people I work for, my daughters, their education, etc. That kind of betrayal is just about up there with child abuse and deserves seriously harsh penalties.
Embezzlement is pretty common. The justification varies from drugs, divorce, gambling, they think they deserve more... They start out borrowing.
There are some basic procedures you can put in place to prevent this.
1) Don't let the person that opens the mail be the person that pays the bills.
2) If you are the owner, review the bank statements and checks every month. Just look at them - I look for checks that have been altered or are to vendors I don't recognize.
3) Don't let whoever creates purchase orders receive the orders and pay for the orders.
4) Have someone other than the person that opens the mail or the person that writes the checks approve every invoice before it can be paid.
5) When you pay an invoice, have a copy of the bill attached to the check when you sign it. Randomly look at them every time you sign a check.
Don't put yourself in a position where you have to trust an employee to take care of your money without any oversight. If you can't do all of the above, ask your accountant for procedures for checking so you can catch theft. We have a company we sell to and every 3 months the AP person changes based on the vendor's letter of the alphabet to further try and stop collusion.
Watch the money coming in and out the door. If you really want to tighten it up, ask your insurance company what you have to have in place to be able to buy employee dishonesty coverage. It only takes one embezzler to kill your business.
