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Here with Shannon today! Talking about her work as an accounting analyst and chief finance officer and what she’s seen in record keeping and also dealing with employees.
The biggest mistake people make is not doing things in a timely manner and then they hurry along at the end and put things in the wrong places. People are generally very stressed and they make bad decisions when they're stressed.
How to handle it differently: each day, identify the 3-5 most important things done first.
Another Huge Mistake
The next mistake people make is misclassifying expenses by the business owner or an employee. If something, like a piece of equipment has a long life it needs to be amortized, not expensed, for example.
Some people may do this intentionally. That’s fraud, and Shannon says she sees most of these people get caught. People lost their jobs and some had jail time.
Sometimes people say there’s assets when there are not. They might be trying to keep something on the books when the money was used for something else, or to hide that someone is removing money from the business.
Be Aware of Fraud and Prevent It
If you employ people, you need to watch for things like this. You need to be aware. If you’re blind to it, not paying attention, in a lot of cases you’re asking to be stolen from.
You need checks and balances
For example you don’t want the same person opening the mail AND making deposits, if at all possible. Separate the responsibilities—and be especially careful with cash. Cash has legs.
Restaurant owners deal with a lot of theft. Food, cash, and equipment! Scott has had a restaurant where an employee unscrewed the espresso machine and walked off with it.
As an employer keeping good records is your way of finding out if your employees are trustworthy or untrustworthy. Reagan said: trust but verify.
Quickbooks is one of the easiest ways to keep track of your books for business owners. One way this can add additional peace of mind is that importing your statements directly from credit cards and accounts eliminates the possibility of transcription errors, another way people can hide missing money.
With computer systems another thing to think about is to take account management seriously. For example, don’t give someone the ability to add transactions and delete them.
If you do have staff, you should make sure they are taking some time off. This way abnormalities may show up while they’re away. You may have thought they were such a dedicated employee, working almost everyday, but it turned out they were stealing from you.
Again, we’re not saying all of your employees are stealing from you, but when it comes to really zealous, good workers, there are two camps: the truly great people and then the people who make themselves irreplaceable for the power of feeling irreplaceable (and leaving you in the lurch if things don’t go their way).
Most people, when they start to take things, it’s because they feel entitled or disgruntled—and it might not be anything wrong that you did. It may have started with their parents or old friends.
Some preventative measures you can take:
- Basic and intermediate training phases are important
- Revisiting basics often eliminates excuses for not following procedures
- Having ability to change people up prevents over dependance on one person
Fences make good neighbors. You need to set correct boundaries with your employees and they will be good employees.