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Bookkeepers Embezzle and It’s On the Rise
This Article Will Focus On what motivates bookkeepers to embezzle money, material, goods, services and office supplies from you and your Plumbing And Mechanical Company.
“A recent study found that business school education not only fails to improve the moral character of the students, it weakens it. ..students were asked, if given a chance of being caught and sent to prison, they would attempt an illegal act that would net them a profit of more than $100,000; more than one-third responded ‘yes’.“
The primary psychological driver behind Bad Bookkeeper embezzlement appears to come from a feeling of entitlement. In my opinion, all Contractors are under increased attack due from Bad Bookkeeper embezzlement in part to the concept that “Redistribution of the Wealth” is now an
acceptable behavior. In my opinion, it appears to have gained traction in the public arena beginning in early 2009; you draw your own conclusions.
In time, I sincerely believe self-responsibility and personal accountability, which are only two of the vast number of the many great qualities of all successful contractors with the highest integrity and trustworthiness of people like you, will win the day.
Contractors are contacting us for help with their bookkeeping services because we have solutions that help reduce the chance of bookkeeper embezzlement because our contractors bookkeeping services system is cloud based QuickBooks Desktop version online and it is available 24/7 and more importantly WE DO NOT TOUCH YOUR MONEY! We do all of the back office work including Data Entry, Job Costing, Payroll processing, preparing Quarterly Tax Returns and reconciling Bank and Credit Card Statements and WE DO NOT TOUCH YOUR MONEY!
You collect your money; you authorize all payments using the PIN numbers, debit and credit cards and printing checks or whatever method you are using now to pay your bills. Because WE DO NOT TOUCH YOUR MONEY We have practically eliminated the biggest source of Bookkeeper embezzlement. When we see a transaction that looks strange, we bring it to your attention.
Frankly, there is no way to stop 100% of bookkeeper embezzlement; however, just as a lock does not stop 100% of all thieves, what the lock does is encourage the thief to look elsewhere for easier targets. Part of our job is to help remove the temptation to embezzle.
The trick is don’t be the contractor who did not hire our services and then be the victim who hires the bad bookkeeper we replaced.
The Top Ten Excuses Embezzlers Use
#01 “I’m really not 100 percent sure why I did it. I’ve been thinking about that the last two-plus years.”
#02 “I hate bookkeeping, anyway.”
#03 “I could use $10,000 to put a little spice in my life.’”
#04 “I am not getting a fair shake at work.”
#05 “They owe it to me because I am the one doing all the work around here.”
#06 “I’ve made a lot of mistakes and now I’m forced to answer to them.”
#07 “I was getting a divorce and needed to amass legal fees for the divorce and the related child custody battle.”
#08 “In the beginning I took a little money but when it wasn’t discovered I kept doing it because I enjoyed a lavish lifestyle.”
#09 “Everybody does it”
#10 “I needed a new car and in fact I deserved it!”
It is estimated the number of bookkeepers caught embezzling from Plumbing And Mechanical Contractors and all other contractors are less than one percent of the total.
Think About That!
99% Of Bookkeepers Who Embezzle Are Never Caught!
In most cases, the ones that are caught are rarely convicted because all too often it is the Plumbing And Mechanical Contractors and all other contractors who have the burden of proof. They are forced to spend thousands of dollars on forensic accountants and attorneys to prove the theft occurred.
Even when the Plumbing and Mechanical Contractors and all other contractors have proof beyond a reasonable doubt, in most cases it is near impossible to persuade the authorities to prosecute. Primarily because Plumbing And Mechanical Contractors and all other contractors are viewed negatively in the media and in society as a whole. As a result all too often the authorities treat it as a “Victimless Crime”.
Most, but not all, in-house Plumbing And Mechanical Contractor bookkeepers have a predictable path they follow. It starts out them having the best intentions and after a while, they experience a phenomenon known as Cognitive Dissonance. The next step is they become envious of the lifestyle they see the Plumbing and Mechanical contractor enjoying.
Fortunately for them they hardly ever see the real life experience of a Plumbing and Mechanical contractor outside the climate controlled, clean office with good lighting, real restrooms, beverages and a relatively quiet environment.
I have assembled a short but very informative e-book on the subject of which you can download by clicking here: http://www.fasteasyaccounting.com/Portals/125770/docs/part%20of%20what%20drives%20bad%20bookkeeper%20behaviors.pdf?&__hssc=&__hstc&hsCtaTracking=1add712b-e157-4c3f-ab0d-183d43fa6b36%7C740f8c8a-4535-40dd-81e8-a4cb0a421e05
This subject is fascinating and is part of the training we use for our contractor coaching clients to help answer the questions every contractor has in their mind. “If you know the answers the questions will not bother you – Randalism.
For a small Plumbing And Mechanical Contractor there are some simple steps you can take to help prevent embezzlement:
- The Owner Signs All Checks – Nobody else every signs any checks. It is O.K. if your bookkeeper prints the checks, just make sure the owner signs them.
- Three Separate Checking Accounts – One for your main operating funds, one for payroll with just over enough to clear all outstanding payroll checks and one for the owner’s debit card purchases.
- The Owner Inputs The PIN – For all payroll or payroll tax deposits. Letting your contractors bookkeeper be responsible for payroll or payroll tax deposits is like giving them keys to the kingdom and saying “Take whatever you want”.
- No Company Credit Cards – Let employees be reimbursed for company expenses.
- Every Employee Needs Time Off – Any employee that does not want to take a holiday or a vacation may appear loyal, but there could be another reason. It is wise to check each employee’s work when he/she is gone.
- Never Let Anyone Take Work Home – You could get in trouble for not paying overtime and there is too many opportunities for copying your company files, customer or client lists and selling them with your competition.
- Make Bank Deposits Every Day – Rain or shine busy or not. Photocopy and scan all checks and bank deposit slips and upload them to your paperless server.
- QuickBooks Backup Copy Every Day – QuickBooks has a built-in feature that will do it automatically and there are a number of other services you can use as well. Never let the bookkeeper take a backup copy of your QuickBooks out of the office for any reason. Doing so will make it easier for them to embezzle and harder for you to claim your innocence.
- Petty Cash – If you have a cash drawer balance it every day the same way as a bank account. Bookkeepers who develop the habit of embezzling usually start with taking small amounts, often from petty cash. Keeping track of small amounts of money can help keep large amounts of money from disappearing.
- Keep Blank Checks In A Safe – Most office supply stores sell small safes for under $150.00 and it is money well spent. All it does is slow down and deter the bad bookkeeper.
- Bank And Credit Card Statements – Need to be mailed to a post office box or the home of the construction company owner and opened by them. Never let the bookkeeper open any bank and credit card statements.
- Owners Need To Verify – All check numbers, including voided ones.
- Check References Before You Hire – And do a search on convictions (not charges).
- Review Your Key Performance Indicators (KPI) – Every day as an internal-control check and watch for unexplained changes in the balances.
- Don’t hesitate to call the police – If you suspect your bookkeeper is stealing. Waiting can only make it more difficult for the police and they may get the idea you are O.K. with it which could make it harder to prosecute the offender.
There is a lot of work here but it could save you thousands if not hundreds of thousands of dollars. One of the best ways to limit your exposure to bookkeeper embezzlement is to outsource your contractors bookkeeping services to us because we handle all of the construction bookkeeping services chores and we NEVER TOUCH YOUR MONEY!
This Is One More Example of how Fast Easy Accounting is helping construction company owners just like you put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that and a lot more valuable to people like you and me so stop missing out! Call Sharie 206-361-3950 or firstname.lastname@example.org and schedule your no charge one-hour consultation
Profitable Contractors and Construction Company owners have known about the value of outsourced bookkeeping services and contractor coaching services like ours for a long time and now you know about it too!
QuickBooks Experts In Construction Bookkeeping Services. We serve contractors across the USA including Alaska and Hawaii. Thinking about outsourcing your contractor bookkeeping services? Click here to download a free guide to finding the right contractor bookkeeping service for your company.
About The Author:
Randal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington, www.FastEasyAccounting.Com He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Plumbing Contractor, General Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor, QuickBooks For Contractors Expert and Xero Contractor Accounting Specialist, Bill.Com Guru and Tsheets ProAdvisor. Check out our Contractor Success Map Podcast on iTunes and Follow Randal on Google+
I leave you with this heartfelt blessing – “If knowledge is power and power over yourself instead of power over others leads to your lasting success and wealth perhaps, it would be worth your time to learn as many answers to the questions regarding the causes and effects of running a profitable Plumbing and Mechanical Company.”
Randal L. DeHart, PMP, QPA
PS: Sean Kavanaugh was a recently interviewed on The Contractors Success Map Podcast. His story of what it was like to be a Plumbing Contractor is absolutely awe inspiring and a must listen for new and experienced contractors. He skillfully weaves a thread of success using his “Words of Wisdom” into the fabric of his narrative. You can hear part one by clicking here.