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

Melissa Clark
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Melissa Clark

Head of Content & Customer Marketing at Incfile
Melissa sets the vision for Incfile's content marketing and customer relationship management. Melissa has more than 10 years experience in various marketing roles, and a passion for supporting small businesses as they incorporate and grow. She loves sharing information that will help business owners maximize their LLCs, Corporations and Nonprofits. In her spare time, Melissa is an active member of The Junior League and enjoys running half marathons.
Melissa Clark
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