Trust me I’m an employee, but should you?

Trust me

Trust me 

 

Trust me I’m an employee – Should you?

When you go into business, there are a number of traits which you need to be successful. Common sense should obviously be one that you should possess and disappointingly, a distrust of other people is also often required.

In a recent article, which involved an accountant discovering a fraud committed by a trusted employee, which made it sound much more highbrow than simply stealing, , it was clear that the business owner had failed to put in even basic checks to keep control of his money. This is a common problem as all sense seems to leave people when the deal with money in a business.

When you were a child and your mother asked you to go to the shops for her. She would handover some money, ask for a receipt and change. A quick tally up made sure that there had been no trips to the sweet shop. So why would you not put simple checks in place to deal with your business cash?

When you decide to delegate responsibility to your team, you need at the same time to ensure that checks and balances was in place to protect yourself and the employee, particularly if it involves money and/or stock. Stock? Any stocks! Yes, there are stories of stainless steel dinghies made in factories, but food and drink are obviously more prone to what is euphemistically called shrinkage

You should make it clear that you are checking and that you think that it is important. One client had a cash difference of £10,000, roughly £100 per day, over 20 of tills in the quarter before we put in proper checks. Nobody would call it stealing, but no one was asking why there were so much going missing. However, once everyone knew that checks were in place this fell to less than £5 per day, with most tills correct to the penny.

Sadly, for many people the temptation to take stuff that isn’t theirs is too strong especially when they think that nobody is checking or perhaps cares. So always make sure that you have robust systems to control your business and make sure that everyone knows that you are checking and that you care about errors. That way you are less likely to become the victim of theft.

Discuss these matters further with Brian Russell on 01661872004.

About the Author

Brian RussellBrian Russell FCA is a Chartered Accountant with over 30 years of experience working with owner managed businesses in North East England. He formed Russell & Co in 2000 to build upon his experience to provide high quality part time financial directorships for smaller companies particularly in Newcastle upon Tyne and Northumberland. Russell & Co is based in Ponteland.View all posts by Brian Russell →