By: Brandi Finocchario On September 26 of this year the FBI and the US Attorney General’s Office announced that a Washington DC metro area restaurant chain had become a victim of internal fraud.
Over the course of ten years, the chain’s Corporate Controller managed to embezzle over $600,000 from the company. It was found that much of the funds taken were used to pay her personal credit cards. In addition to this she charged the corporate credit cards to pay for unauthorized personal expenses and used one of the chain’s vendors to obtain goods for her personal use.
To hide her actions, the former controller asked vendors to alter invoices, fabricated emails, and mischaracterized her credit card transactions.
Situations like this bring to light the importance of internal controls to prevent theft and fraud with in small businesses. Thirty-one percent of all embezzlement cases are against small businesses, which tend to fall victim to theft because they are less likely to have the anti-fraud controls that a larger organization may have.
More than eighty percent of fraud is committed by individuals in the following departments: accounting, customer service, executive/upper management, operations, purchasing, and sales. It is even riskier when the same person handles more than one of these tasks.
If you are a small business owner and you have a small staff where one person services many different departments it is important to utilize an outsourced business service like BookKeeping Express to do monthly bank and credit card reconciliations and confirm information on your company’s balance sheet.
For more information on how BookKeeping Express can help you protect your business contact us today!