4) Company Snapshot
The Company Snapshot in QB provides an overview of key financial categories. Being aware of the business’s customary or historic financial activities and comparing them to snapshots of current customer account balances, income and expense trends, accounts payable vendors, and “reminders” allows the business owner to see discrepancies and ask questions. A common fraud activity is creating a fictitious vendor from which the business buys known products or services, often touted as providing a better price. Business owners and managers should never hesitate to ask questions about activities they don’t remember authorizing or about vendors or customers they don’t recognize.
5) Effective Budgetary Control.
Every business has a budget, right? In QB you can enter the budget manually (which is required the first time), or create the budget using prior year activity. The data can be entered for both balance sheet and income accounts, and by class. Effective budgetary control can provide an early warning when key business objectives are in danger of not being met. Employees can be very clever, spreading costs over several projects to mask activities that fall over budget. However, by comparing a prior year’s budget to the current budget juxtaposed against actual activity can identify possible fraud.
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Next Blog post 11/26/2014
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