It’s called the silent killer of commerce. It’s a heart attack and stroke all rolled into one. It’s called FRAUD!
At Plus & Minus, we believe that fraud can be prevented by taking 2 steps:
Reviewing your Cash account on a daily basis and having more than one person involved in your Cash account.
Checking your Budget vs Actual reports on a frequent basis.
We believe that having as many people as logistically sane involved in the Cash transactions presents more of a hindrance to theft/fraud than if only one person works on that account. While only one person can steal, more than one makes the process a conspiracy, and there is NO honor among thieves. I can visualize the confession of suspect #1 under the brutal glare of the Klieg lights: “That no good rat stole more than I! I told that stinker not to steal too much!” They might catch on. So I assume, suspect #1, that you will cop a plea and roll over on the other suspects. You’ll be out in 5 years.
Is that expense in the PNL “normal?” It may seem “normal,” but is it really? Is it what we expected it to be? Who is going to vouch for that number being “normal?” One way to know is to compare the budgeted expense to the actual expense. Is there a serious increase or decrease? Can the difference be reconciled?
The same thought can be used for the Revenue accounts. What was the estimated/budgeting amount of sales? Is the invoice over or under the estimated amount? If so, why? Are there change orders to reconcile this difference?
If you spent good money putting together a budget, why not protect the integrity of the numbers by comparing the budgeted amounts to the actual amounts? It’s only common sense.
