Large corporate businesses have multiple banking relationships. Many use sweep account services where deposits into one account or instantaneously moved into other checking accounts. However, with today’s technology, small business owners can manually manage this process without paying excess fees.
Each of my businesses typically has four checking accounts and one savings account. One account is used to accept credit card payments, cash from clients, and checks. From this account, the funds are transferred into three separate accounts: Payroll, operating, and savings. Any credit card processor has access to deposit and withdraw funds from the business's checking account. Moving the funds quickly, prevents any opportunity for fraudulent withdrawal errors.
In one of my businesses, this process avoided a potential disaster. At my travel agency, the average payroll totaled more than $25,000. Within hours of one payroll, my bookkeeper verified the account to determine when the payroll cleared. She noticed four check numbers of checks that were cashed and not listed on her payroll report. To not cause suspicion, each cleared check had a similar amount to the average individual payroll. The dates of each of these checks were the same as the payroll date.
As part of our security process, we only moved the total amount from our operating account into our payroll account. There were only enough funds to cover the original payroll submitted a few days earlier. Any fraudulent checks cashed would overdraw our payroll account.
As President of the company, I was the only person with signing authority. My bookkeeper asked If I added any checks to the payroll without her knowledge. I had not. The check numbers cashed were sitting in our office. The only way these checks were written was within the prior twenty-four hours without anyone’s knowledge from my business.
Our checking accounts were with a very large national bank. I spoke with their headquarters and insisted they provide me with the locations of where these checks were cashed. They admitted these checks were cashed at one of their branches in Las Vegas I had no office or employees in Nevada.
I suggested this bank had an employee with a gambling problem. It would be easy for any teller to print counter checks using my checking account number. Hoping the amounts were in line with my average payroll, they may not have been caught. Since I had quality controls instilled to watch every penny, my bookkeeper caught the error immediately.
I considered myself lucky the customer service rep admitted where the checks were cleared. When I suggested embezzlement, they immediately corrected the situation, closed my account and transferred my funds to a new account, and accepted only those checks and amounts from my original payroll. If I had all of my cash in this checking account, the situation could have been disastrous.
- Know the state laws governing social media defamation and be prepared to take legal action when necessary.
- If your business hires employees, include anti-defamation and social media rules as part of your company's employee policies and contracts.
- Be sure to enforce a non-disclosure agreement for all employees and contractors.
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