Small business owners generally rely on a single person to manage the accounting and finances of the business. One of the quotes I like to use to describe why this is a bad idea is from John Dalberg, “absolute power corrupts absolutely.” In the context of having access to money, when you have one person with total access to money and limited to no oversite, corruption and fraud will occur. That is why our tagline is Trust but Monitor. Once you add oversite to the equation, corruption occurs much less because the opportunity to act without oversite is less.
According to the Association of Certified Fraud Examiner’s 2020 World Report on Fraud, 48% of employee fraud occurs due to lack of internal controls or lack of management oversite. But that’s the problem, a small business can’t afford multiple employees as bookkeepers or accountants just for watch over each other. Also, business owners are not sure what to review, especially if the reports are prepared by the person committing the fraud. Owners are busy running the business and delegate this responsibility.
What is an affordable solution?
We have been practicing CPAs for over 20 years. Stay Dot was born out of the need for quick, affordable, and easy to understand internal controls to help find and detect employee fraud. For this to really work we needed to create a way for information to go from QuickBooks Online directly to the owner without the need to ask the Bookkeeper to provide anything. Stray Dot Analytics easily connects with QuickBooks Online and provides the data that powers the employee fraud dashboard.
Example of how the dashboard works: One graph that is automatically populated is the Duplicate Payments same vendor same day. In the image you can see that 30 different payments or 1%, were paid on the same date to the same vendor for the exact same amount. Normally, you would not be empowered to ask your accountant or bookkeeper why 30 payments this year where the same vendor, the same amount on the same date. Stay Dot also provides you with a downloadable excel file or printable list of the 30 transactions.
In this example you do not need know accounting or have any knowledge of the transactions. You also got the information without involving your bookkeeper or accountant. However, it’s a simple and powerful question. Why would you pay the same vendor, the same amount twice in one day?
When this happens, and the bookkeeper knows about it, your fraud risk decreases. Even without asking any questions. Now, the dashboard is a great tool and you will ask questions, and the questions are fraud related. Not sure what questions to ask? Our site provides an auto-generated report that you can review with your bookkeeper. The average loss due to employee fraud for a small business is over $100,00 and lasts over a long period of time.
What does Stray Dot cost? 19.95 a month.
Trust but Monitor.