Diary of a Bad, Bad Bookkeeper: Deletions and Voids

Betty Bookkeeper Headshot

Dear Diary,

Let me just premise this entry by saying — crap crap crap crap crap.

I got a phone call from the accountant today.  It’s tax time, and the accountant wants to meet with me to go over the books.  Since I’ve never worked with this accountant before, I have no idea how closely they are going to want to look at the books.  I can’t help but fear that the accountant is going to figure out what I’ve been doing if he looks too closely at the books.  So I was in full blown panic mode all day.Betty Bookkeeper Headshot

So after thinking about it, I did what I could today to clean up the books.

I started by voiding out some of the checks and deposits that I had made, hoping that would be enough.  But then, when I realized that the checks were recording in the check register as “voided checks”, I had to rethink that strategy.

My solution:  I began deleting the checks and deposits instead.  That way, they disappear completely from all registers.

But then another problem popped up.  By deleting the checks and deposits, the bank balance began to change.  So, I went back and made sure to delete just enough to keep the balance close to what the original balance was.  Hopefully, it will be enough to fool the accountant.

Hopefully the accountant is a fool…

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How to Spot This Problem:

superhero_edited_no_maskWhether you have a good bookkeeper or a bad bookkeeper, deletions and voids are always a part of bookkeeping.  Mistakes happen and bookkeepers have to find and correct those mistakes to make sure their books balance.  One of the biggest benefits and downfalls of various bookkeeping programs like QuickBooks (especially QuickBooks) is that many of the programs make it really, really, really easy to do voids and deletions.  In fact, just doing a “Ctrl + D” while in any facet of QuickBooks will instantly delete that item.

Having said that…let me point out that bad bookkeepers will do an excessive amount of deletions, especially after reconciling the bank accounts.  Finding those deletions and voids are an excellent way to know if there is a problem with your bookkeeper.

While I am not familiar with EVERY bookkeeping program, I do know QuickBooks.  And if you have QuickBooks, it is very, very easy to find those deletions and voids.

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QUICK NOTE:  Now if you do suspect your bookkeeper of embezzling, the easiest thing to do would be to take a previous backup and “Restore It” to your QuickBooks program.  By doing this, you wipe out any and all changes that might have been made.  This is NOT a good idea if you want to know what your bookkeeper might have changed.  Instead, make a backup copy of the current program before restoring anything else, that way you can always go back and look more closely at any changes that have been made.

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Now, if you do have QuickBooks, finding these deletions are super easy.  All you have to do is go to Banking – Reconcile.  By doing so, you will then see a screen like this one with a “Locate Discrepancies” button:

By clicking on “Locate Discrepancies”, you can see ALL CHANGES THAT HAVE BEEN MADE SINCE THE LAST BANK RECONCILIATION.  If the account has never been reconciled, then nothing will appear here, which indicates a whole other set of problems.  If the account has been reconciled, you can find a list of every change that has been made and what the change was SINCE THE LAST RECONCILIATION.

After you have your list, simply “Undo (the) Last Reconciliation” to see what deletions were made in the reconciliation period before that.  You can keep doing this all the way to the very first reconciliation, and thus get a a fantastic picture of what has been deleted, voided and changed without your knowledge and after the reconciliation.  Remember… excessive deletions, voids and changes can mean that there is a problem with the bookkeeper…not necessarily that they are embezzlers so much as that they make a lot of mistakes.  But again, keep in mind that all bookkeeping has a certain amount of small mistakes that are caught every month when the reconciliations are done.

Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

Betty Bookkeeper Headshot

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I got a new credit card today. Well, technically, I got a new “company credit card” today. When the boss wasn’t around, I went ahead and called his credit card company and told them we had lost his company card and needed a new one. They asked me for all of the usual identifying information – social security number, mother’s maiden name, address, phone, account number, etc. – and of course, I gave the guy on the other end of the line all of that information. I then told him that I wanted to change the password question “because the last bookkeeper got fired, and we need to protect my boss’s identity.”

The guy at the credit card company didn’t even miss a beat – after all, companies get new bookkeepers all the time. “Which question would you like?” the guy asked me. “Do you want a question about your high school, pets, favorite cities…” and on and on and on.

“How about the question about pets,” I answered innocently.

“Okay. What is your pet’s name?” he asked.

I thought really quickly, then answered, “Moron.”

“Excuse me,” the guy on the phone said.

“My pet’s name is Moron,” I repeated sincerely. What I wanted to add was – “and Moron’s my boss” – but I managed to hold my tongue… barely. It was so hard.

“Okay. Moron it is,” the guy said in a serious tone while clicking away at the keys on the other end of the phone.  “Anything else I can help you with?”

“Oh. I almost forgot,” I added. “Our office has moved. The address I gave you was for the old address. The new address and phone number is…” and then I gave him my home address and personal cell number.

Again, I heard clicking on the other end of the line as the poor dupe updated my boss’s “new information.” When he was done, he said, “You should get that credit card in the mail by…”, which turned out was today.

So, I swung by my house and checked the mail during lunch. The card was already there. So I went ahead and treated myself to lunch – on the boss, of course. After all, he doesn’t pay me nearly enough for all the excellent work I do for him. And since the boss never opens the mail – especially that particular credit card bill– what he doesn’t know what hurt him.

I wonder what I’ll buy tomorrow… Maybe some new earrings. I’ve always wanted pearls…

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How to Prevent this Kind of Bookkeeper Theft:

You would not believe how incredibly frustrating it is to call into your credit card company and find out that all of your password information has been changed. Not only can your password info be changed, but some people even go so far as to change the “mother’s maiden name” question. Of course, the simplest way to stop this is to catch it early. You can do so by doing the following:

  • Open your credit card statements, or check your transactions online regularly. If anything seems questionable – no matter how small or large – call the credit card company immediately and ask them how many cards they’ve sent out. You can also verify that your security information is still what you originally created.
  • If they tell you your password information has changed, be sure to throw a high holy conniption fit and demand to speak to an account manager or “their boss.” Get this account closed immediately because whoever has your card can still make purchases even while you’re on the line. They will send you a new credit card with a new credit card number within a matter of days.
  • Get copies of your three credit reports as soon as you possibly can because – quite frankly – if your private information has been changed, there’s nothing to keep them from signing up for more credit cards at vendors you may never even have heard of. But, the good news is that every single one of those stolen cards will show up on your credit reports!, but not always all three of the reports, which is why you should spend the extra money to access all three. (In fact, for $14.95 a month at Transunion, you can actually access those three reports and credit scores for free every month. It may be worth it if you ever find yourself a victim of identity fraud.)
  • If a credit card company calls you and says there is questionable activity on your account, get online immediately and see what they are talking about. If they are contacting you, they are probably seeing something they’ve never seen on your account before. So even if you have your credit card on you, it never hurts to double check whatever charges they’re concerned about.
  • And lastly, make sure you know where ALL cards are at all times. I once had a client who ordered a card for his wife – a card which never arrived. It turned out, someone stole it from his mailbox and was shopping with it in the next town and my client never knew. Luckily, I caught it with the very next credit card statement when I asked for receipts that matched the charges, and we realized immediately what had happened. So even though the thief had managed to steal more than $7,000 in 15 short days, my client was not liable for a penny, especially because he disputed the charges right away. (Which is another good reason to check those statements every month.)

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Click Here to read the Previous Entry: Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 55) – The Sister Company Scam


Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Dear Diary,

Today was payday – the second since I’ve been here.  I figured it was about time to test the Double Payday Scam – to see if my boss would actually catch me.

So, I started the day by doing the Payroll.  Just like two weeks ago, I created and took all of the paychecks to the boss to sign.  He signed them, with only the occasional request to see a corresponding timecard…then he signed mine without question.

I took the checks back to my office and set mine aside.  Then, I printed up another paycheck that I took back to him.

“What’s this?” he asked me, glancing briefly at my double payday.

“It’s a replacement check.  I double-checked my income and realized that I had entered my withholdings incorrectly, and QuickBooks took out too much in taxes.  So I voided the other one and reprinted this one.”

“Okay,” he said, shrugging and then signing my check.

And just like that – Double payday.  If he had asked me to produce the voided check, I would have gone back to my office and voided the first check… but since he didn’t, he’ll never know.  Even if he opens the bank statement (which let’s face it, he probably won’t), he’ll see the extra paycheck and think he’s just looked at the same check twice.

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How to Catch the Double Payday Scam:

All a small business owner has to do to catch the Double Payday Scam is to ask to see the voided check, or to insist that you will void all checks personally.  They can then refile the checks, and you have protected yourself… it’s that simple.

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Click Here to Read the previous entry:  Diary of a Bad, Bad Bookkeeper (Day 14) – The Carnage Begins

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

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Diary of a Bad, Bad Bookkeeper – (Day 9) In the Clear

Betty Bookkeeper Headshot

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Dear Diary,

Well, it’s been a little over a week, and I would say I’ve got “the lay of the land.”   Apparently, the Owner wasn’t kidding when he said he’d be out of the office a lot.  I have yet to actually see him in the office for more than an hour a day.  He comes into the office in the morning to give his field guys their daily assignments, then he talks to me for about 10 minutes before he too heads out.  Right before he walks through the door, he stops and talks to the receptionist, telling her to forward all of his important calls and take messages on the less important ones.  Yada yada yada.  Everyday is the same.  (Which bodes well for me.)

Today though was a really good day.  Since the first day I got here, I’ve been the sole person in charge of the mail.  And that mail comes to me unopened.  Today, the bank statement came in.  I’ve been waiting to see if the owner would make an exception when it comes to the bank statement, but he just tosses it on my desk without even looking at it.  That’s a good sign for me.  That means when I start forging checks, he’ll never know.  Any checks that come back, I can shred before he gets them.

Man, I love working for “really busy” Small Business Owners.

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The Importance Behind the Bank Statement:

To many, choosing the person that opens the bank statement is unimportant.  But here’s the General Rule:  He who Opens the Bank Statement First is the One Who Can Steal the Most Without Getting Caught. That means, if it’s the bookkeeper – who has access to the checks – you are BEGGING them to steal from you.  If it’s the receptionist, that receptionist may end up in cahoots with your bookkeeper to steal from you.  But if it’s You-the-Small-Business-Owner, you can catch theft as soon as it happens.  So be smart… open the bank statement first every time.  Even if you don’t look for theft, it’s often enough to dissuade thieves in your company from stealing bank funds.

Diary of a Bad, Bad Bookkeeper – (Day 1) A New Job

Betty Bookkeeper Headshot

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Dear Diary,

I just started my new job today, and it’s perfect.  It’s a small company with only a few employees, most of whom are never in the office – they all work “in the field.”  Also, there’s a receptionist, so I won’t have to be constantly answering the phone (thank goodness for that).  The receptionist is very friendly, and I can tell that she’s looking forward to having another woman in the office.  Most of the other employees are men – all the better for what I have planned.

The interview went well (…of course it always does).  The owner told me that he’s never in the office because he’s a contractor and he always has to be at a job site.  He told me that I would have to “take initiative” and “put out a lot of fires.”  Basically, he wants to not have to deal with customers and vendors too much, and so he expects to handle everything.  Just as long as he’s left out of it.  Idiot.  Still, it will make my job even easier.

I came in this morning and saw the owner just before he left.  He handed me a set of keys for the office and told me where the checkbook was.  He then showed me my office and stayed for a few minutes to chat.  He told me that he had called a few of my references and he was satisfied.  Thank heavens that the law won’t let previous managers give bad references, lest they get sued.  But even if that wasn’t the law, there was no way in hell I was going to put down my ex-boss as a real reference.  Nope – a friend is good enough…

Guess I should get back to work.  Gotta learn the ropes – before I rob them blind.

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Click here to read the next entry:  Diary of a Bad, Bad Bookkeeper – Day 9 (In the Clear)

Diary of a Bad, Bad Bookkeeper (Day 55) – The Sister Company Scam

Betty Bookkeeper Headshot

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Dear Diary,

Today I became a business owner.  That’s right, I’ve opened my own business and am about to make a million dollars the easy way – with little or no money down.  Okay – I spent a little money.  But technically, it wasn’t my money.  It was my boss’s money – or maybe I should call him my “investor” – not that he knows he’s an investor.

If only all those companies touting their “make a million dollars without doing any work at all” plans knew how easy it really was… because my way really is the “no work necessary” way.

Anyway… I went down to the courthouse today on my lunch break, a little bit of petty cash in hand.  I registered a new “DBA,” also known as a Fictitious Business Name.  The form only cost $20 and now I have a business name.  The lady behind the counter told me that I would have to run the new business name in the newspaper for 30 days to announce my new business venture, but it can be any newspaper in the county.  I found a small newspaper company that will do it for about $25 for the whole month.  Pretty good deal, huh?

So once I had my Fictitious Business Name document in hand, I went down to the bank and opened up a “business checking account” for $15 a month.  I even went to the same bank as my boss’s bank.  Figured it means less driving around when I have to go the bank for him.  And normally, I wouldn’t pay so much for a checking account, but again, it’s not my money.

So guess what my new company’s name is…

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Well, Diary, you know how I work for “Smith’s Distribution Company”.  I named my company “Smith’s Distinguished Corporation.”  The reason – stealing, of course.  I’ve seen a lot of deposits come across my desk and I noticed a pattern on the [ad#Word Checks].  People tend to write the checks to “Smith’s,” “Smith’s Dist.,” or “Smith’s Dist. Co.”  Seeing all those checks, I suddenly realized that I can totally steal those checks.  Since “Smith’s Distribution Company” is not fully printed on the check, I can put it into my new business checking account and the tellers will assume that the abbreviations on the checks are short for the name of my company.  They’ll probably even assume that the name of my company is just a sister company to my boss’s business.  And unless he goes down to the bank and asks if I have my own business checking account, there’s no real way that he’s going to know what I’m up too.

After work, I actually made my first deposit.  It was a check for $1,200.  See – the experts were right.  You do have to spend money to make money.  All I had to spend was $60 and I made my first $1,200.  This is going to be sweeeeeet!

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How to STOP the Sister Company Scam:

As mentioned above, it’s nearly impossible to know if someone in your company has begun this scam.  You would first have to guess the Sister Company’s name as closely as possible before you can even look it up – although you can try and look it up at your local County Recorder’s Office.  Most likely, you won’t find anything online about the Sister Company because the Embezzler would have to advertise their theft for it to show up in search engines… and there’s no way they’re going to admit to anyone but a diary that they’re a scum-sucking thief.

Now, just because it’s hard to spot the scam, doesn’t mean it’s hard to stop the scam.  The reason this scam happens is because it’s an easy “crime of opportunity.”  It gets by because no one thinks to double check it, then prevent it.  To do this, all you have to do is get an “For Deposit Stamp” (or to put it another way, an Endorsement Stamp).  e

Think about this:  When you go to a large retailer like Target, what do they do with checks?  As soon as the cashier receives the check, they run it through the machine, and the machine prints an endorsement on the back.  That prevents the check from going into any bank account but the one linked to that business.  That’s what a “Deposit Stamp” can do for you.  When you stamp a check on the back with your company name, account number, and the words “For Deposit Only,” the bank will then make sure that check gets into the correct account.  Period.  It’s that simple.  You can also get a stamp for the front of the check that will stamp your company’s full and accurate name, but the best way to prevent this kind of fraud is to get an Endorsement Stamp.  This kind of custom stamp is often $10-$20 at online sites, but I found a deal to get a free stamp at www.iPrint.com – all you pay is Shipping and Handling. That’s a $15 value for $3.49 S&H total. Check it out and get yours today if you don’t already have one: [ad#Button – Free Stamp]

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Click Here to Read the Previous Entry:  Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

Diary of a Bad, Bad Bookkeeper: (Day 149) The Collusion Scam

Betty Bookkeeper Headshot

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Dear Diary,

Today was a not-so-great day.  Apparently, I have a partner now.  I never intended to have a partner, but it appears I have no choice in the matter.  Here’s what happened:

I was in my office (innocently shredding checks), when I suddenly heard a man say, “I know what you’re doing.”

Quickly slipping the leftover checks back into my desk drawer, I looked at him with my most innocent expression.  “What do you mean?” I asked sweetly.  It was Ernie, one of the flooring installers that handled the bigger clients.  He was considered the boss’s second-hand man.  “What do you think I’m doing?”

“You’re destroying the evidence.”

Crap.  How did he know? But I decided to play it cool.  “What evidence?” I scoffed.  “I don’t know what you’re talking about.”

“Those checks you’re shredding are the checks you’ve forged.  Am I right?”

“Why would you say that?” I demanded, pretending to be affronted.

“Because I’ve seen all the signs before.  The new car…the fancy clothes.  You order lunch all the time instead of bringing it from home like the rest of us do.”  He glanced down the hall behind him, then stepped into my office, lowering his voice as he did.  “I know what you’re doing…and I want in.”

In?  Was he nuts? “I don’t know what you’re talking about.”

“Yeah, you do.  And you can either cut me in, or I’ll rat you out.”

Cold chills ran up and down my spine, and my palms were actually sweating.  I could tell by the smug look on his face that he knew he had me between a rock and a hard place.

“Look,” he continued, propping himself onto the edge of my desk and leaning toward me.  “You don’t have to tell me everything you’re doing.  I don’t really care.  I just want a piece of the action.  And I have the perfect way to do it.”

I narrowed my eyes.  “Oh yeah.  What’s that?” I asked.

“Simple.  I have a friend that runs his own construction company and can get us plenty of jobs.  You cut some checks to his company with an additional amount of money, and he’ll pay the rest of the money back to us.  The boss won’t ask questions because he’ll be able to see that the work is getting done, and we can make a tidy sum on the side.  So what do you say?  Should I call my friend?  Or should I call the boss?”

“The boss won’t believe you.  He trusts me 100%.”

“He trusted his last bookkeeper too – until I accused her of a few things.  And I’ve been here for seven years.  Who do you think he’s gonna believe?”

And just like that, I had a new partner.  But at least if we’re both stealing, he can’t accuse me of anything without me making a few accusations back.  I won’t be going down alone if he decides to betray me.

On the plus side, it is a quid pro quo situation. I help him make a little extra money, and he gets me new carpeting in my entire house.  I think I want purple…

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How to Stop the Collusion Scam:

Spotting and stopping the Collusion Scam is really difficult.  For one thing, the invoices that the bookkeeper receives will match the checks going out.  That makes embezzlement even more difficult for an auditor (or auditing accountant) to find because there’s legitimate backup and everything appears to be “on the up and up.”  For another thing, the money being paid out will not have your bookkeeper’s name on it, and the money they’ll be taking home will be coming from one or many of their colluding partners.

Therefore, to spot and stop this scam, you need to trust your gut.  Pay attention to who is hanging out in your bookkeeper’s office.  Most bookkeeping positions involve staring at a computer all day, and if someone is spending more time than necessary or usual, take note.  Begin observing that employee as well and see who they recommend as “work associates.”  Keep an eye out for how many checks they receive each month, and if those payments seem a bit high.  Also, look for signs that those employees are spending more money than they’re making.  Oftentimes, an employee’s spouse will make a lot more money than the employee, but there will be a consistent spending pattern if that is the case.  It’s the sudden changes you want to look for.

Also, since one of the easiest ways to stop embezzlement is to be the only person who opens bank statements as they come in, you want to keep an extra watchful eye out for checks to vendors or customers that also seem “a little too high.”  If you feel like a company is making too much money for various projects…shop around.  Call that company’s competitors and see what they would charge.  And stay open to switching vendors.  Because the truth is – you never know when someone is going to decide to steal from you…”by any means necessary.”

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Diary of a Bad, Bad Bookkeeper: Men Suck!

Betty Bookkeeper Headshot

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Dear Diary,

Today was another, “Not so great day”…but this time it was one for the books.

Today, when I went to work, I wasn’t feeling so hot.  In fact, I ended up puking into my office trash can just as the boss walked in.

Betty Bookkeeper Headshot“Hey,” he says to me, looking concerned.  “You’re sick?  You shouldn’t be here if you’re sick.  Go home!”

“She was sick yesterday too,” the traitor receptionist chimed in from behind him.  “She’s been sick for a while.”

“Have you been to a doctor?” the boss asked me.

“No.  I don’t need to go to the doctor, okay!”  I snapped.  “I’m fine.”

“You’re three shades of green,” he countered.  “You should definitely go home.  You may have the flu.  Or even worse, food poisoning.  In fact, I insist you go home until you get better.”

The receptionist gave me a triumphant smile from over his shoulder.  The witch never liked me.

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“I won’t get better for another eight months, alright!” I bit out, my eyes narrowing at her.

The receptionist’s eyes widened.  She understood right away.

My boss didn’t get it, of course.  He never does.  “Why do you say that?  What happens in eight months?”

“That’s when she has a baby,” the receptionist chimed in.

The boss’s eyes widened, his expression immediately going to my still-flat belly.  “You’re pregnant?”

“Yes, I am,” I growled.  And I don’t know who the father is, I silently added.  It was either my husband (who would be over the moon if he thought I was pregnant), or Ernie (the employee who had blackmailed me into looking the other way while he stole from the company…let’s just say that things have progressed between us).  If it’s Ernie’s baby…well, he’d probably be thrilled too.

Men Suck!

“That’s fantastic!” the boss said.

You suck too!

His expression changed as he looked at me though.  I could see the exact moment when he realized this was going to affect my place in the company sometime in the near future.

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Heading him off, I said, “But you don’t need to worry about me missing any work.  I’m not much of a stay-at-home mom.  I won’t need more than a few days off from work when the time comes.”

His face twisted.  “Are you kidding?  That’s a very important time in a child’s life.  It’s when they bond with their child.  You’ll want more than a few days off of work.”

“You forget…I have two children already.  There’s no way on Earth I want to spend any more time with a child.  Trust me.  I’ll be back for work fairly quickly.”

“Oh don’t be foolish,” the receptionist chimed in.  “You’ll definitely want time off.  And I know just the place to call to get a temp in here.”

Did I mention I hate the receptionist?

“That sounds like a good idea,” the boss said, smiling at her like she was brilliant.  “Why don’t you call them and see how much they cost.”  Turning back to me, he says, “And you don’t worry about anything, Betty.  When the time comes, you’re job will be here.  We love having you here.  You take all the time you need to bond with your baby.  In the meantime, can I get you something?  Are you hungry?”

I could feel my teeth grinding.  “I’m fine.”

“Well then, I guess I’ll let you get back to work.  You take it easy.  And don’t worry about the trash.  I’ll send Ernie in to empty that for you.”

Then the boss left, shuffling the receptionist off with him.

So now I’m freaking out.  Time off?   I can’t take time off.  What if someone catches onto what I’m doing?  What if the next bookkeeper is better than me?  What am I going to do?

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A Warning Sign

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While this article is a bit more of a dramatization then I usually go for, there is a point here.  The point is, this is a warning sign:

Whenever a bookkeeper doesn’t want to take a vacation, maternity leave, or even call in sick…it could be a warning sign.

You see…good bookkeepers aren’t worried about people going through their offices, whether other staff or other bookkeepers.  Good bookkeepers make themselves replaceable at all times (in my opinion).  The best bookkeepers have nothing to hide or fear.

Embezzling bookkeepers, on the other hand, fear anyone going through their paperwork, their computer files, and sometimes even their filing cabinets.  They fear being caught all the time.  Taking time off for maternity leave or going on vacation is often when they get caught.  Instead, they spend as much time in the office as they can, protecting the terrible things they’ve done, as well as their secrets.

How to Know For Sure

As always, if you are concerned that your bookkeeper is embezzling from you, hire someone to look more closely at your books.  Accountants do not do this unless asked.  Virtual Bookkeepers or Independent Bookkeepers are an excellent source for looking for fraudulent activity.

Start by getting a backup of your bookkeeping program when your bookkeeper is not around, and send it to the hired auditor.  Also get copies of your bank statements.  These two things will help them get started looking for embezzlement.  From there, they will either ask for copies of suspicious checks, credit card statements, receipts…and any number of things.

The key is…if you suspect, don’t site blindly by.  Take this as a warning sign and ask someone for help.  It’s better to spend a few hundred dollars hiring an auditor then to lose thousands and thousands to an embezzler.