UAE, the economic hub, along with offering numerous opportunities for individuals all around the world, is presenting ideal opportunities for fraudulent activities too. According to a source of approximately 1 in 4 firms in the UAE have experienced fraudulent activities.
Approximately a quarter of the firms interviewed, in the region have been victims of fraud in the past two years. With so many opportunities available to commit these frauds, there is little being done to counter these activities.
Fraudulent activities in the financial department of organizations can lead to companies shutting down, which is why the interference of professional bookkeeping firms is critical. Opt for bookkeeping and accounting firms in Dubai when considering the financial aspects of your business. Read on to know how to prevent these frauds.
How To Prevent Bookkeeping Fraud
Whether it's your money guy taking the rake and not returning the change or failure to perform reviews for the financial functions and information, there are numerous opportunities available for employees to commit book keeping and accounting fraud. Read on to know some basic ways you can prevent any such activity:
Divide The Work Responsibility
Numerous middle-sized businesses have designated “money guys who are responsible for not only paying bills but also for issuing paychecks, the creation of financial statements and bank deposit handling. Since other entities aren't involved in keeping close checks on the individuals, processes and since the “money guy” can quickly cover up their prints, it’s easy for fraud to go undetected.
It's important for each financial transaction to go through two employees. Where one takes care of collection or making payments, the other employee should be responsible for keeping books and ensuring the amounts are right. It's ideal to outsource finances to bookkeeping services leaving more important tasks behind for your employees.
Employees committing fraud often take out cash payment, more than required, and never return the change. In addition, employees responsible for cheque writing may create two cheques, one that pays the bills but the second one in their own name, however, shown differently in books as an additional bill.
Companies today offer automatic clearing house payments where the transfers are automatic. With these automated techniques, it becomes almost impossible to deceive the company.
One way to combat this type of fraud is by mailing cheques online or by using software that prints the personal details of the payee. By checking memo and amount, you ensure that the payment is accurate. Manual checks tend to interfere with automated systems and create red flags that are easily detected.
Perform Reviews And Controls
Regularly review reports although the bookkeeping and accounting functions like accounts payable and receivables may be done by different individuals it’s important to review their work too. Regular reviews help remove collusion in fraud and also timely detection of false entries.
With proper monitoring in place, the reviews take little time beyond what work managers are doing to monitor the health of the company in terms of finances. All the managers need to do is cross-check receipts and invoices against record in books and both with cash in the bank.
Companies often feel that reviews and reconciliation of accounts is a timely process and controls take too much time, but due to the critical nature of the tasks, it's extremely important for companies to invest in man power that allows them to handle their finances.
Regardless of the size of your firm, it's important to ensure that your financial processes are secure to prevent frauds payroll frauds and losses. Opt for the best bookkeeping and accounting firms in Dubai and fortify the security of your financial department. With the well-reputed entities doing the job for you, there’s simply no going wrong!