Most small business owners probably don't consider the potential dangers that embezzlement poses to their business. Unfortunately, this crime can even happen to these smaller companies. Understanding the importance of forensic accounting is a crucial part of ensuring you don't fall a victim to this danger.
Embezzlement Can Occur In Many Ways
Even in a small business, embezzlement is a serious possibility. It often occurs when one person, like a personal accountant, has all the control over a businesses finances. Typically, it will occur slowly over a period of time. A few dollars may be missing at the end of the day or even just a few pennies. However, that money will start adding up to a huge loss.
For a small business, this kind of financial loss can be staggering. While a large company may survive a loss of a few thousand dollars, it can cause a small business to go bankrupt. That's why business owners need to understand the symptoms of this crime and how to spot them as soon as possible.
Symptoms A Trusted Employee Is Embezzling
In some instances, it may be possible for a business owner to spot when their employee is embezzling from them. In a small business environment, it will typically be easy to spot a person taking a little too much money off the top. It should also be easier to spot somebody working overtime as a way of getting isolated near the source of the cash.
However, a small business owner may also be too busy with the day-to-day aspects of their company to notice. Even worse, they don't have the kind of training necessary to notice small accounting tricks that can help a person embezzle thousands. That's when a forensic accountant is so important.
Why A Forensic Accountant Is Wise
Small business owners who suspect that an employee of embezzlement should hire a forensic accountant to catch them in the act. These specialized accountants are skilled at spotting the signs of illegal financial activity and tracking it to the source. They are also able to pin-point the exact person who is committing the crime.
With their help, a small business owner can catch the source of their leaking funds and avoid losing even more money. While it may not be possible to get all of their lost money back, they can recover more fully without someone actively stealing from them. For more information, contact companies like MacKenzie & Company LLC.