Watch Out for These Warning Signs of Small Business Fraud!

Watch Out for These Warning Signs of Small Business Fraud!

A business owner wears many hats.  One of those hats should be fraud detective because small businesses are by far the most vulnerable to employee fraud.  While you may want to believe the best about your employees, you should be proactive to prevent someone from taking advantage of you.

1. Is the person who takes payment from customers the same person to make a bank deposit and reconcile receivables?   These tasks should be split among employees to prevent one person from having unlimited access.

2. Who approves expenditures and writes checks for payables?  Make sure you review invoices and recognize all the vendors or purchases you write or sign checks for each month.  Are all checks accounted for each month?  Do you have a signature stamp laying around the office unsecured?  Make sure that you have division of these duties and safeguard checks in order to prevent opportunity and temptation.

3. Do your employees seem to spend more than they make?  If there doesn’t seem to be a good explanation for this, you may want to pay closer attention.

4. Do you require employees to take vacation every year?  Many frauds are detected when an employee is away and someone else is performing his/her duties.

5. Are you paying employees for time they did not work?  Review employee timecards and compare against work schedules to discourage an employee from claiming and being paid for more hours than they actually worked.    

Honorine M. Campisi, CPA

Tax Reform Impact of Moving Expenses

The moving expense deduction used to mean less taxes for those who made a qualified move for employment.  If you met the required time and distance tests, you were able to deduct costs to pack, transport and store belongings, as well as reasonable transportation and lodging expenses for you and your family while moving.

Additionally, in the past when you received reimbursement for moving expenses from your employer, the reimbursement was not included in taxable income as long as certain conditions were met.

The Tax Cuts and Jobs Act suspended these moving expense rules beginning in 2018 and continuing through 2025.  There is one exception to the suspension, and that is for active duty Armed Forces members and their families who move due to a military order requiring a permanent change of station.

 

Honorine M. Campisi, CPA