First, know who you are paying. Every time you hire an employee or vendor, do a background check. Create a checklist of the specific checks you will do – criminal, credit, governing boards, etc. Follow this system every time. Second, know your expenses. Have a system to review and approve expenses before they are incurred. When you sign a check, the check should include the approval for the expense. Also, before you sign a check, ask yourself the following to make sure it is not for an unnecessary expense: Do you recognize the vendor? Is the expenditure something you have already approved? Does the name on the check match the name on the support? Do the amounts agree? Also, leverage this system with other forms of payment like credit cards. Third, know your account activity. Every month, make sure the activity on your bank statement matches the activity in your records. When you do this, look for anything unusual and review the checks that have cleared. Use this reconciliation system with other accounts like investment accounts, credit cards and loans. Many banks and financial institutions have expanded their online tools to help small organizations protect their money. Leverage these resources to help you protect your business and your wealth.
Want to learn more about how to make way more money and pay way less in tax? Book a call with the team at TFW Advisors® today!