Making sense of financial statements can be a challenging job that is best left to your accounting firm. But you can achieve efficient oversight and help protect your auto dealership from internal theft by understanding and controlling the smaller numbers that are part of the bottom line.
Many businesses inadvertently assign tasks to an employee that crossover in such a way as to allow an unscrupulous staff member to cover his or her own tracks. A classic example is when the same person who reconciles the bank statement also receives the mail, giving that employee the opportunity to destroy notices from the bank about irregularities.
If you think this problem isn’t widespread, consider this. One survey showed that one third of employees said they would steal from their employers if they were sure they could get away with it. Another survey showed that 38 percent admitted they’d already stolen from their companies. Between $60 billion and $120 billion is lost to employee theft every year, an average of $500 to $1,000 per employee.
The key to preventing employee theft is to separate duties in such a way that at least two pairs of eyes look at any function that deals with the receipt or disbursement of your dealership’s assets. Take a look at the following checklist and see how your dealership’s internal controls measure up.
Please contact Keith Laudenberger via our online contact form for more information.
Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.