Spot-check your accounting processes


This article first appeared August 29, 2011.


Today I heard from a friend who is beside herself with anger after she caught a staff member stealing – or as the employee claims, borrowing – a few hundred dollars from petty cash.


This is more about a breach of trust than any great financial loss. The entrepreneur has been through the books and can’t find any more problems.


She didn’t want to hear it, but I told this entrepreneur was that she was lucky – lucky to have picked up the theft, lucky that it was only a small amount lost and lucky her business wasn’t damaged further.


Then I dashed back to the office and did a quick spot-check to ensure I’m not being taken for a ride by a member of my staff.


My spot-check is pretty simple – I get last month’s record of petty cash transactions, pick one and conduct a little audit.


If there is a record of $50 of petty cash for a lunch, is there a receipt to back this up?


Is there a description of who the lunch was with and why it was held (for example, with client A to discuss matter B)?


Did one person or two sign off on the reimbursement or removal of the $50?


Most of the time, everything stacks up straight away, or after a quick phone call to the person involved.


But knowing the boss does the occasional spot-check lets everyone know how seriously this stuff is taken.

Get it done – today!


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