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25 Sep, 17
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Trust Your Accounting Employees, Just not 100%!

posted in by Patty McGoldrick

So, my Mom taught me this lesson back in 1999 when I had an employee I completely trusted with my business financing functions embezzled over 25k from me. I didn't learn until just last month the lesson she taught me almost 20 years ago... Trust but not 100%. My daily quote I published just the other day was by Author Frank Sonnenberg, “Lessons in life will be repeated until they are learned.” Ya... so I guess it took me 2 times to learn this lesson but boy have I learned it now.

Back in 1999 I was behind 6 months in balancing my bank statement and the person I hired not only processed Accounts Payable but took care of the mail as well. So, when the bank statements came in she simply would take out the checks she wrote to herself and had posted to Vendors like AT&T and others. But I was behind so I didn't catch them until I hired a CPA full time and told him to start there.

Well, he did and would call the bank for missing checks but she would just throw them away when they came in because she processed the mail. She took a few days off and I did the mail and one of the checks he called for was in the mail and I almost dropped when it was made out to her for $2600 dollars but posted to a vendor I knew we didn't hire for the year 2000 change over. I called him anyway and of course he never received a check from us. So, we found out she was stealing my money. That day we hid the checks but she had come in after hours to finance her long weekend and realized we knew because she couldn't find the checks. She never came back to work.

We prosecuted but I only got back maybe $100 dollars and she fled the area. At that point, she became a felon and once caught she would go to jail. A couple of years ago we received a check from the courts for $2500 out of the blue... She must have been caught but we haven't seen another cent since. One lesson for all business owners here is never ever let the same person open the mail that processes Accounts Payable or Receivables for that matter and of course payroll. The other is have the bank statements mailed to your home so you are the only one to open them and check to make sure there are no suspicious checks being written from your account and please balance your own bank statements or hire someone outside of your staff to do it!

August 20th, 2017, I found out an employee that worked for me for 12+ years had been embezzling money for about 5 years now. Someone I trusted 100%. Yup, I made the same stupid mistake again... Unbelievable! I couldn't believe I did that again... I was just so busy working on the company I let it go again! They used a different method of course because I check the bank statements every month since the first one happened. Most of this went through Petty Cash and small payroll raises and unauthorized bonuses. I'm just sick over it... This time though, I am going to get a final number, offer them to pay it back, pay my legal fees, CPA's time and some other expenses or we go to the District Attorney. They are an accountant so they should want to pay it back otherwise they lose a career and they can't have that I'm sure.

It has taken me away from running my business for a month now and I need it to be over so I'm going to get the number together quickly and give it to my lawyer this week and make the offer. I need this to be over so I can get back to running my very busy company.

The take away here is in the title of this post... Trust, but never 100%! Watch the money, payroll, AP and AR... Know everything that is happening in that department. Try to stay away from a Stamp signature but I cannot at this point because I have grown the business that I just am not there every time AP goes out... Also, back in 1999 my regular liability insurance had coverage for "Employee Dishonesty" so I was able to collect 10K of it within a week of finding out about the embezzlement. This time there is none of that anymore but you can purchase it of course. I won't need it because I have finally learned not to trust anyone 100%! If you have any questions please feel free to contact me directly on my cell phone at 617 755-7247! Happy times will be here again... Another valuable lesson for a small business owner! Thanks for reading!0

By Patty McGoldrick

President/Owner Immediate Connections, Inc. -

2017 Women in AV Award Winner by Infocomm International now




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Patty McGoldrick

Patty McGoldrick

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