Keeping Your Finances In The Black

Posted on: 14 August 2014

Despite the type of business that you run, there is always the potential for fraud and the misappropriation of assets. Sometimes it can be hard to catch these discrepancies without professional investigatory assistance. Forensic accountants can step in and help business owners catch financial discrepancies, saving them money in the process.

Less Cash Misappropriation

If your business keeps cash on hand in a register, then there is the risk that it will be misappropriated. Sometimes the theft of cash from a register is difficult to detect, depending on the type of register that you have and your internal control procedures over cash. Forensic accountants can trace cash transactions from your ledger back to the point of sale, finding discrepancies in the process. If cash is being misappropriated, you can correct your control procedures and reduce the theft of your funds, saving you money.

Fewer Omissions in Financial Statements

If there are intentional misstatements of your financial reports, forensic accountants can find them through a series of substantive tests of your account balances. Although there is no guarantee they will find discrepancies if they exist, they have the skills and insight to uncover tough-to-find omissions. If there is fraud that is occurring and they catch it, then it can save you a lot of money. This is especially true if the dollar amounts involved are large.

Less Inventory Shrinkage

One of the many tests that forensic accountants can perform is a test of inventory balances, which can uncover discrepancies in inventory counts. This process typically involves testing the account balances in your ledger against the physical inventory count. If there is shrinkage, forensic accountants can uncover the discrepancy and help you save money by identifying weaknesses in your internal control procedures and possibly suggesting corrections.

Fewer Inappropriate Vendor Contracts

It's possible that your vendor contracts are not being followed, either by your staff members or by your vendors. The price terms may be too high, because your staff members know the vendors and have made inappropriate deals. Also, your staff members could have overpaid vendors for any number of reasons. Forensic accountants can come in and catch these discrepancies, helping you save money in the process. They can also catch invoice discrepancies as well.

Forensic accountants, such as at Epps Forensic Consulting PLLC, know how to test the assertions in your financial statements to find discrepancies. By uncovering fraud and the misappropriation of assets, forensic accountants can save you money.