Chapter 6 Theft Prevention

http://veterinarynews.dvm360.com/dvm/Expenses/Theft-prevention-Are-you-internally-controlled/ArticleStandard/Article/detail/666570?contextCategoryId=45464&ref=25

Summary

The article teaches business owners to prevent theft by doing clever internal control of assets in the company. The article lists 6 ways of internal control that can be used in many small and medium businesses. The first one is one to maintain, one to record. In any given situation, the more record-keeping duties that can be segregated, the better. If only one person is responsible for both maintaining the record and the asset, there are more opportunities for procrastination, abdication of the task or outright theft. Business owners or managers should determine the practice's acceptable level of risk. It is also management's responsibility to review practice operations contemporaneously and ensure that assets are used for the right purpose. Occasionally, discrepancies will occur, and they should be analyzed and reconciled. Other ways including Seeing is believing, Hold the line, and Ask away are useful, too.

Connection

If a business, especially a small business, doesn't have a proper internal control to protect its assets, it is the owner and the manager's responsibility to set up a strict policy to control its assets, especially cash and checks. In Chapter 6, we learned many useful methods including deposit cash daily, assigning different employees, and other methods. Out of all assets a business has, cash has the most problems. A business shouldn't keep a large amount of cash in the store because checks are almost the same as cash. You can pay you employees with checks, pay your bills with checks, and pay your tax with checks. Even though issuing checks could be costly, it safe and secure.

Inflection

Theft happens. We can't expect to catch them in the act every time. However, we can scare them away almost all the time. Outside theft are easy to deal with: couple of cameras, alarm system, and some securities can easily scare them away. Insiders are hard to deal with because you know them and they know you, plus they are hard to catch. Internal control helps us to prevent theft from our employees. Assigning different people for doing and checking reduces the possibility of a theft, and even the theft does happen, we can catch the guy sooner.