Fraud. Missing refunds. Repeat subscription fees we forgot to cancel or didn't know that we signed up for. These are financial transactions that we are used to looking for.
But there are many others you may not be catching. If you're not paying attention with a watchful eye or if you're too trusting and taking things like checking statements for granted, you may be giving some of that money away without even knowing it!
Read your statements every month
Whenever you get statements from your banks, credit cards, PayPal, Venmo, etc., review each transaction. If you're working with a bookkeeper, they will do this for you, will catch ones that stand out, and will only need to have you look at those that require additional information.
Banking issues to look for
1. The check deposit amount doesn't match the check
It's a bank, so of course, they'll always get the check amounts correct right? Wrong. We've seen it time and time again when we look at checks deposited or sent by our clients - the amount written on the check doesn't match the amount deposited by the bank. Even when it's a typed and non-handwritten check! Right now I bet you're thinking about all of the checks you've and received and whether they've been correct 100% of the time.
Don't blindly trust a bank. Find a bookkeeper you can trust.
2. Double deposited checks
Have you ever sent someone a check and had it deposited twice? Are you sure? We've seen it happen. If you or a bookkeeper isn't looking to match your sent checks to make sure they were only deposited once, you could be giving out employee bonuses or vendor gifts you don't even know about.
3. Receiving payments twice
This one is similar to the one above but puts you on the other side of the table. While it sounds nice to think about getting extra payments, the money isn't yours. And if you aren't paying attention, you may spend the money and then end up having to pay it back down the road, and could be in a bit of a bind.
4. Bank bill pay snafus
If you use your bank for bill pay, you need to know whether they deduct the amount when the payment is sent or when it is deposited by the recipient. That's right, some of the major banks will deduct that money from your account before it reaches the intended payee. Where could that leave you? There is a chance that check will get lost in the mail and the recipient may never receive it. Maybe the recipient received it but forgets to deposit the check. This means the money is out in the abyss. Good news is, most undeposited checks expire in 90 days and the money will be reversed back into your account. Bad news, you budgeted for that amount 3 months ago and are now faced with an unpaid (and overdue) bill to pay. Make sure you follow up on bill payments with your vendors to ensure that they received on time.
Bonus: Payroll Mishaps
Although a payroll company is not a bank in the traditional sense, they have access to take large amounts of money from your bank account and even the best ones make mistakes. Whether it's a miscalculation of payroll taxes, an incorrect direct deposit to your employees, or processing fees that are more than you agreed to pay, it's important that you look over 2 essential reports every pay period. A "Payroll Journal" report gives you a breakdown of gross wages, payroll taxes paid (by employee and employer) and any employee deductions for benefits. The "Cash Requirement" report tells you exactly the amount of money that will be deducted from your bank account for payroll. It's all too often that we see mistakes with payroll that don't get caught until several months later (once we're hired to look it over, of course).
It was already time-consuming work for you to check each of your statements for fraud each month. But it's imperative that you also add in the steps above to look for the other ways you could be unknowingly giving money away.
As the owner of a small business, the hardest thing to come by is time. If you don't have the time or expertise when it comes to finding and fixing these types of issues, work with a bookkeeper. They will be trained in spotting all of this and getting them resolved as well, ensuring the money you earn is the money you get.
Your time is valuable. If you want to make sure that the transactions on your bank and credit cards are correct, but don't have the time or nerdy detective work isn't your thing, we can help - reach out today.
And don’t forget to download our small business budget template. Another great resource for you!
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