A few days ago, my partner and I met with two owners of a small company to have a Listing Agreement signed to sell their company. While we were talking about their business, the owner mentioned "after the embezzlement, we really started to struggle."
The owners had a "full-charge" bookkeeper who embezzled approximately $100,000 from the company because she had signatory rights to their checking account and the bank line of credit. Over a very short period of time, she stole the money and the owners had no idea that it was happening until someone else brought the issue to their attention. The owners said several times during the conversation, "I trusted her!"
The lady was prosecuted but never went to jail. She received five years probation and was ordered to pay restitution. So far, over the past two years, the company has received less than $5,000 restitution and nothing in the past six months because she is unemployed. I know, hard to believe that a bookkeeper prosecuted for embezzling $100,000 would be having a hard time finding work, right?
If you give an employee the opportunity to steal from the company, as they did, they will steal EVERY TIME. There are very simple controls that can implemented to stop this type of problem from occurring. But if those controls are not in place, it is going to be very expensive.
Then, it will be you who is telling a similiar story which will start with: "after the embezzlement, our company really started to struggle!"
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