$1,800,000.
This is the amount of money an accountant, Richard A. Mandarino, stole from a Chicago construction firm. He was convicted and sentenced to jail this summer.
How did he do it?
He entered false payment requests in the construction company’s accounting system, causing checks to be issued to vendor companies for goods and services that the accountant knew were never provided. Mandarino then converted those payments to his and others’ personal use. He concealed the thefts by creating fictitious credits and offsets in the construction company’s accounting system.
The owners trusted the accountant and didn’t verify his work.
Don’t let something like this happen to you!
Many owners have told me that “I trust my bookkeeper with my life.” That makes me cringe. You can trust. However, like Ronald Reagan said, “Trust but verify.” You, the owner, have your name on the door, your signature on loans, your responsibility to for payroll and payroll taxes.
Can you spare a mere five minutes? Hopefully you said yes.
Call your bank. Send your bank statements home. Then LOOK at them each month. This takes another 5 to 10 minutes each month. Once you review them, you can give them to your bookkeeper to balance the checkbook.
Look at your bank accounts online every day. This takes another mere 5 minutes. You’ll spot things, ask questions, and help keep your hard earned cash safe.
Then review the accounts payable and accounts receivable reports with your financial statements. Job cost. This takes less than 15 minutes a week. The owners would have caught the embezzlement before it got ugly and expensive.
The construction company has to generate $18 million just to recover the $1.8 million that was stolen assuming the company’s net operating profit is 10%.
Pay attention! Your business survival depends on it. Don’t lose it to an embezzler!
How financially fit is your business?
Click here to take this one minute assessment.
Ruth King is well known as “The Profitability Master.” She is passionate about helping small business owners become profitable and stay profitable. For over 40 years she has coached, trained, and helped contractors and others achieve the business growth and goals they wanted to achieve.
Contact Ruth by emailing ruthking@hvacchannel.tv.
