BILL.COM BLOG

Balancing Financial Delegation with Fraud Risk

Trenches

Your business is growing – congrats! You’re killing it. The downside? As your business grows, you’re discovering that your valuable time is being spent on administering back office tasks, not leading your business to success. It’s time to pull yourself out of the trenches and get on the front line.

But how do you offset those mundane duties? The answer is simple: Share your financial responsibilities using the primary Principles of War

Here are three ways to protect your company’s assets while reducing the number of financial tasks that increase your personal casualties. 

Separation of Duties 

This fundamental principle of accounting and bookkeeping requires a Simple strategy. Distribute key responsibilities amongst employees in two ways to deter fraud:

  1. Appoint one person to handle money
  2. Appoint another to manage financial records

Easy right? You can delegate responsibilities, but still have the controls in place to protect your business. 

Separation of Duties is imperative to success, and leads to more oversight around financial activities. If someone wants to go full Madoff, and is handling both money and records, that sneaky fraud can easily steal cash or even steer an ACH payment to a different account. Using a mere keystroke to help falsify the records and cover up the theft.

The Separation of Duties are financial Checks and Balances. They make committing fraud much harder and identifying it much easier. 

Revisiting Technology Workflows and Automation

So you’re using cloud technology - great! You can now fine-tune that technology to support your financial operations.

This form of protection needs a Security strategy. Explore the current workflows built into your accounting software and edit them or add new ones as necessary. In order to complete a particular task, just tell your technology who to work with and what to do. 

Tactical Example: If a bill comes in that is more than $500, it cannot be paid until Carl and Rhonda review and approve it. If a bill arrives that is less than $100, Rhonda has the authority to approve the payment. This workflow will act as a guard, ensuring that each person does their part while barring unauthorized individuals from accessing or influencing the process. Don’t let Madoff near this. 

Be sure to delegate to the cloud through accounts payable and accounts receivable automation. Avoid manually compiling, sending, and following up on customer invoices or taking payment information over the phone. Make use of automation to significantly streamline financial activities without surrendering control.

Outsource

The Economy of Force strategy, and the ultimate act of delegating financial responsibilities. Outsource your A/P and A/R to a bookkeeper or accountant. Research, ask respected colleagues for recommendations, and interview thoroughly. Find out how each firm you’re considering handles financial activities.

Questions to Ask: 

  1. Do the financial professionals you’re considering require paper documents or are they tech-savvy and accept electronic versions?
  2. Will you have to visit them in person each month to sign checks and pick up reports? Or do they have a mobile app or mobile payment solution so you can take care of business anytime, anywhere?
  3. Most importantly, will you be able to easily collaborate online to answer questions and access your important, relevant documents?

Don’t ignore these questions. Your life might spiral into extraneous on-site visits and forced lunches at that place you hate. Not to mention the endless paper black hole you’ll find yourself in that will steal both your time and soul. 

Use these primary Principles of War and take the time today to review your financial responsibilities and plan how to delegate them. These strategies will pull you out of the trenches, push you to the front line, and save you the time you need to invest back into your business.

Kate Wilson
Social Media Manager, Bill.com
Kate is in charge of all things social at Bill.com. When she's not writing every type of content imaginable, she's drinking strong coffee and debating the use of the Oxford comma with her coworkers.