I guarantee you that whoever said, “A fool is born every minute,” wasn’t talking about lawyers. Still, Many Law Firms Get Scammed Every Year by Their Bookkeepers It may seem impractical or unnecessary to separate functions, but one person should not be trusted to do all accounting duties. An accounting or CPA firm can help you implement effective internal control procedures to reduce errors and discourage fraud. Following these tips will also help:
1. Don’t let employees sign your company’s checks, don’t use signature stamps, and don’t pre-sign checks.
2. Be the first to check bank and credit card mail. Look for discrepancies and errors. Verify signature on checks.
3. Receive bank statements directly in your email account or at your address.
4. Deposit functions must be performed by two people. One makes copies and records in the deposit book, while the other records in the accounting program.
5. The person who writes the checks must be different from the person who mails the checks. This prevents checks from being “lost” or changed after you sign them.
6. Someone other than the bookkeeper should be doing the bank reconciliations.
7. When signing checks, be sure to compare the corresponding invoice with the name of the provider and the amount of the check. Avoid writing “urgent” checks without support.
8. Print the check register and look for missing checks, extra checks, and incomplete checks.
9. Review accounting reports for charge-offs, write-offs, and bad debts.
10. Online bill payment should only be done by the owner. Employees should not have bank passwords.