Managing finances is an essential task for businesses, as without proper practices and procedures companies run the risk of fiscal errors and costly mistakes. Unfortunately, there are sometimes instances of embezzlement by employees and executives, which can have a severe negative impact on operations. However, by using accounts payable audits, firms can determine where the illegal activity is coming from and they can work to recover the stolen funds.
There are also some steps that businesses can take to avoid this type of misappropriation, writes The Daily Times. The news source suggests that companies implement effective internal controls by having two staff members regularly review financial accounts and approve various documents. Having just one person overseeing these processes can sometimes set businesses up for theft. But by having several workers managing fiscal transactions, firms can ensure practices run smoothly and funds are accounted for.
In addition, the news source notes that company managers may want to routinely review financial records to make sure employees are not writing business checks to themselves, which is often what happens with embezzlement schemes.
If firms suspect misappropriation is occurring, conducting an accounts payable audit is perhaps one of the best ways to pinpoint any illegal activity. Businesses can then focus on recovering the stolen money.