Questions Small Businesses Should Ask Themselves

In a challenging business economy, small business owners must be vigilant not only in expenses, but also with internal controls of the company. Internal controls are the financial safekeeping of your company's assets and are an area often overlooked by small business owners.
Some questions to ask yourself, as a business owner, are:

• Who do I trust the most and what could it cost me if they violate that trust?
• What type of example or "tone" do I demonstrate to my employees?
• What do I know about my vendors?
• What regulatory requirements am I susceptible to and how do I know I am complying?
• How do I know that the controls I have in place are working effectively?
• What do I really know about the people that work for me?
• How much fraud am I willing to accept?
• How often do I contemplate new risks?
• How do I protect information against unauthorized use/access?
• How would I know if someone was…
• Stealing cash from me?
• Forging checks?
• Making bad wire transfers?
• Getting kickbacks at my expense?
• Using related party vendors?
• Paying themselves properly?

Most business owners quickly realize that the costs can be devastating when they think about the answers to these questions, which is why it is so important to safeguard your business against employee fraud or theft.

There are a few tactics you can use including segregation of duties, background checks, and employee dishonesty insurance, but the best practice is to be actively engaged in the finances of your business on a day-to-day basis.