LLCs can prevent fraud, embezzlement with simple steps

There are a few easy ways to maximize success and prevent fraud after forming an LLC.

Fraud and embezzlement often hit small businesses harder than the bigger companies, the Association of Certified Fraud Examiners told the Wall Street Journal. More than 30 percent of all fraud cases occur at companies with fewer than 100 employees, and average $150,000 in losses.

However, the WSJ reports that following a few easy steps can help prevent fraud and theft.

First, using two different employees – one for accounts receivable and one for accounts payable – makes it difficult for someone to hide embezzlement.

Additionally, the ACFE recommends using independent, outside accountants once a year to review the books. The association also told the WSJ that most employees who are embezzling don’t take days off because they think someone might notice the theft while they are gone.

Lastly, embezzlers usually spend the money they steal quickly, so business owners should be aware of sudden changes in lifestyle.

Last week a Massachusetts drywall company received back a portion of the more than $1 million that a former employee embezzled after the government confiscated her three homes, six cars and $100,000 in cash, reported Boston’s FOX Channel 25.ADNFCR-3052-ID-19926818-ADNFCR

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Incfile Team

The Incfile team is here to provide small business owners and entrepreneurs with the tips needed to to form an LLC or corporation, and grow your business.
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