Maintaining a level of control in your company’s finances is necessary to ensure that discrepancies can be identified quickly. 

CEO of Mckay Security, Jason Mckay said that despite having accountants that handle the company’s finances, business owners must maintain an active role, to ensure accountability. 

Speaking with Kalilah Reynolds on #MoneyMovesJa, Mckay said that fraud is using deception and dishonest methods to gain something illegally. 

He noted that one of the main reasons why some business owners choose to outsource the handling of their company’s finances to an accountant or accounting firm is convenience. 

However, this can open the door to fraud.

According to Mckay, there are several red flags that business owners can use to spot if they have been a victim of fraud. 

🚩The business is always broke, even though you’re collecting money

“In the long run, you find that you’re doing business, you’re making money yet you never seem to have the available cash flow to pay your debts … and when you look at your receivables, it doesn’t seem to fit that you shouldn’t have the cash flow to meet your payments, that is a red flag,” he said. 

He said that this might be an indication that money is unaccounted for and queries need to be made. 

He emphasised, however, that is a red flag that may present itself over a longer period. 

🚩Accountant avoids reports

Early signs of fraud could include being unable to get a straight answer to questions from the accountant or difficulty receiving reports. 

“If someone in your organisation who’s handling your money has difficulty giving you reports, that’s a red flag,” he said. 

“If you find that you’re querying things and the person is putting it off, giving you another time or date and you aren’t able to get the result of the query, that is also a red flag,” he noted. 

🚩Cheques are out of sequence

Mckay also noted that even though they are becoming less popular, the use of cheques is another way business owners tend to be defrauded. 

To avoid this, he said, business owners should keep cheque sequence numbers in a particular order.

“You want to see that flow, because usually when fraud takes place, it takes place on an out of sequence with the flow of the cheques,” he added. 

🚩Unauthorized electronic transfers

Mckay also explained that electronic transfers, which have become more popular, is also dangerous, especially if the business owner is not carrying out the transaction. 

“The owner is not normally the person carrying out the process … with electronic transfers, you don’t have the ability to vet every single thing yourself,” he said. 

What you can do

Business owners who suspect fraud can contact the fraud squad of the Counter-Terrorism and Organised Investigation Branch of the police force. 

“We have an incredibly experienced fraud squad that has dealt with a wide variety of fraud cases. When you go to the fraud squad you have clarity. You know exactly where the fraud is taking place” he explained. 

In regards to penalties for persons guilty of committing fraud, Mckay said that sentences are handed down by the Parish Court.

“Usually fraud cases go before the Parish Court, and they have a [maximum sentence] of three years. However, they can send the matter to a higher court, in which case [the sentence] could be far more,” he noted. 

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