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  • Writer's pictureJerry Ipsen, CFE, MBA

Business Owners - Take Control of the Bank Statement

Today, I was asked to assess a possible embezzlement case that could’ve been prevented! The business owner who years earlier acquired a smaller company agreed to retain the “trusted” bookkeeper only to recently discover the same bookkeeper is suspected of stealing from him. My advice to business owners has and will always be to look no further than their (at home) mailbox! Don’t let the bookkeeper see the company’s bank statements before you do and surely don’t have the bank statements mailed to the bookkeeper’s home. Receiving bank statements at your residence is the smart thing as it affords you the opportunity to put eyes on the statement before anyone else does.


Your task is to look for deposits, cash or check, paid invoices, checks that were written manually, and other activity, authorized or not. With a “heads up approach,” you can match or have matched for you any questionable banking items with corresponding journal entries to determine the Who, What, Where, When, and Why! Checks, even manual ones written after work hours or on weekends is definitely a "red flag" and worthy of investigation.


Remember, not everything is a fraud, but isn’t it better to be safe and ask? At a minimum, your employees will know that you are taking a proactive approach to fraud prevention. According to the ACFE 2020 “Report to the Nations,” more than 43% of frauds are detected through tips, half of which are from fellow employees.


So before relying on someone else to discover a problem, oftentimes months even years later as in my case, I suggest you as a business owner be proactive and assert your control. Begin by having the bank mail monthly activity statements to your home, not to the business, and definitely not to the home of your bookkeeper. Not only will you stop or reduce the possibility of suspicious activity, but your good and honest employees will also appreciate the “hands-on” approach!



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