This article first appeared on February 20, 2008.
Dear Aunty B,
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But I think someone might be stealing from it.
We have a book where staff staple receipts, but recently there have been small discrepancies at month’s end. The staff are always making excuses saying they are busy and forgot/lost receipts.
I know it’s not my PA, who is technically in charge of petty cash, as she is extremely loyal and hardworking. And the admin and accounts guys have been with us forever. We have taken a few new staff on – should I start looking there?
(And as I am writing this I just got asked to sign another cheque for petty cash!)
What is this? A “who-done-it? Loyal PA ain’t done it, the long-termers in admin and accounts ain’t done it; so where exactly is your money going?
I can tell, simply by your email, that there are some very sloppy systems in place at your office. AND there is a high likelihood that you are being ripped off if your accounts don’t reconcile.
You don’t say how long you have been putting up with this, but guess what? It is now number one focus.
First of all you must rule out your accountant or bookkeeper. Has he/she been pointing out the discrepancies and urging you to do something about it and you have been too busy to listen?
Next track down the thief. Who does you accountant suspect it is? Who is not providing the receipts? Start a running file noting down your thoughts – that might reveal a pattern.
Now you need to immediately implement proper procedures.
First make one person in charge of petty cash. Explain the new rules to them and let that person spread the word around the office that there is a problem with petty cash reconciliation.
The new rules include no payment of claims made without receipts – NO MATTER WHAT. Claims are reviewed by the accountant. Petty cash claims are stamped as paid once they are approved and reimbursed. All claims have a short description listing the nature and the size of the purchase.
Set out what the petty cash can be used for – that is, it is not a bank. And get the accountant to conduct a random audit at regular intervals.
Lastly reduce the petty cash in the drawer and keep the drawer locked at all times.
And if you want my guess… it’s the PA! This might surprise you, but it is often the hardworking, loyal staff who never go on holiday that are ripping you off. Why do you think they never go on holiday?
Oh, one more thing: If there is a thief at work it won’t just be the cash they are stealing. Check there are no other frauds. For example, printer paper for the office might well be bought for private use.
Your Aunty B