If you don't do all you can to limit people from making unauthorised changes to the information in your accounting records, you could face a similar fate as Trilink Dynamics CC.
It faces liquidation as its bookkeeper, who was motivated by greed, stole R4.5 million from her employer to fund a better life for her family, says Moneyweb.
This better life had included luxury cars, holidays and expensive private schooling.
Have you checked to make sure employees can't manipulate your business' accounting records and get you into trouble with SARS?
All she had to do was channel Vat
and income tax
payments meant for SARS into her own bank account.
Now, the company doesn't have the funds to pay the R4.5 million it owes SARS, and SARS's already rejected one compromise offered by the company.
The worst part?
The embezzlement only came to light when the bank put a hold on the company's account because of a SARS action, adds Moneyweb.
That's why you need to have good accounting controls in place to prevent your employees from manipulating your business' accounting information.
Because it's not always intentional – an employee could also accidentally pass incorrect accounting transactions.
If this happens, not only will management make decisions based on inaccurate financial information, but tax
returns submitted to SARS would be based on inaccurate information, which would result in penalties and interest being levied against your company – or worse, in Trilink's case.
Luckily, you can protect your accounting records from unauthorised access and manipulation…
Four ways to limit the risk that your employees will embezzle funds or manipulate you accounting records to their benefit
One way to do so is by locking your accounting records and supporting documents in a secure room that only management and accounting personnel can physically access.
It's also a good idea to ensure that all electronic files and information is encrypted and saved on a local server that's located in a secure server room with passwords that're issued to only management and accounting personnel, says The Practical Accountancy Loose Leaf.
Then, to make sure your accountant or bookkeeper isn't using her power to embezzle funds, you need to scrutinise your accounts every month to detect patterns that shouldn't be there.
It's also a good idea to communicate and enforce ethical values, so your accountant will feel more accountable and less likely to make accounting errors – intentional or not, adds FSPBusiness.
By doing so, you'll be more likely to pick up on errors in your accounting records that would lead to trouble with SARS down the line.
Rather be safe than sorry!