Most small organizations struggle with internal controls when it comes to bookkeeping and accounting. Private companies, not-for-profits and government agencies make up nearly two-thirds of the reported cases of fraud. Many of these organizations have fewer than 100 employees, and generally there are not enough staff members to facilitate the processes necessary for good internal control.

According to the 2012 Report to the Nations on Occupational Fraud and Abuse, organizations with fewer than 100 employees continue to be the most common victims of employee related fraud. While the number of reported cases in the small business sector is down, one must consider that there was a decrease of 170,000 (2.5%) small businesses between 2008 and 2010 according to The Business Journals of U.S. Census Bureau.

Smaller organizations are most vulnerable to billing fraud due to the difficulty in creating and maintaining good internal controls. Check tampering is three times higher in small businesses than larger ones. Skimming, cash larceny and payroll related fraud is nearly double the amount of reported cases over companies having more than 100 employees. Establishing good internal controls is essential to any business, large or small.

While references from previous employers and background checks are important, most instances of employee fraud are committed by first time offenders. Most small business owners trust their employees, bookkeepers and partners implicitly or may even be friends with them. Maybe they are too busy to review their financial records on a regular basis. This presents an opportunity for individuals having a personal situation to commit a crime. By not taking the time to get involved in the financials of your organization, business owners leave themselves wide open to fraudulent activities.

One of the first steps in deterring fraud is to separate duties as much as you can. While most small businesses do not have the resources to segregate everything, procedures can still be put in place.

Off-Site Business Services offers a way to assist smaller organizations in strengthening some of the internal controls through a new web based online bill payment system. It provides a low cost solution to separating the duties in organizations with small staff.

Here is how it works:

• Your firm will have its own email address and fax number to upload bills or other documents.
• Each member of your organization will have a separate login to perform the duties you assign to them.
• There is a complete and automatic audit trail for each transaction.
• Account information is completely hidden to prevent improperly mailed checks and reduce risk of information theft.
• Uses 256-bit encryption - just like your bank.
• Your data is backed up in multiple locations and encrypted.
• Funds are FDIC insured.
• All vendor and bill information is synced with your accounting software to eliminate double entry.
• Bills are automatically routed to designated approvers.

Looking at the table above, let's assume your office consists of two people: you and a bookkeeper. Your bookkeeper would be assigned the role of Clerk, and you would be assigned the role of Administrator. Your bookkeeper is able to enter bills, record payments made through QuickBooks and manage vendors. No bills can be approved or paid by the bookkeeper. Only you have the authority to approve and pay bills. You don't even have to be at the office to approve or pay bills. You can do it right from your smart phone or tablet. There is no need to leave signed checks in your absence for bills to be paid.

Off Site Business Services has a unique login webpage through Bill.com set up specifically for our clients who wish to utilize us to pay their bills. For more information, call us at 877-966-4441.

Every month, we will feature an application that we believe works well with QuickBooks and can do likewise for your business.

Mavenlink

It is a very impressive tool. Mavenlink provides a comprehensive workplace to track and complete projects. Data is centralized in the Cloud keep everyone abreast of every aspect of the job by desktop, email, Apple or Droid devices. Integration with Google applications (Docs, Calendar, Contacts and Tasks) allows various departments, sales reps, subcontractors and other team members to all work together on projects and upload files for other team members. Each user has their own role and permissions.

One of the best features is that it also saves time and money by avoiding duplicate data entry by syncing with QuickBooks. Typical users of Mavenlink include small and medium-sized businesses, non-profits and pubic administrations.

Collaborate on projects, track budgets, time and expenses, and sync to QuickBooks with one click. Track time across all projects and assign an hourly rate. Keep project and accounting teams on the same page. Use your email or mobile device to review and reply directly to messages. Upload multiple files to your private and secure cloud. Share large files with team members in any of your projects. Integration with Google Docs, Calendar, Tasks, and Contacts. Mavenlink provides a central, collaborative workplace to track and complete projects.