I have worked with many mid-sized $35- 160 million in Sales companies.  I have also seen bookkeepers hold millionaire CEOs hostage by their control of the checking account.  (There are many wonderful honest bookkeepers out there.  This article is about those bookkeepers that abuse that responsibility.  I feel a responsibility to warn CEOs.)

Bookkeepers control when and how people get paid.  Some follow instructions by the owners, some don’t.

Many of the instructions seem minor but they are important.  (i.e. “Take this deposit to the bank today”. “No, I’m too busy.  I’ll do it next week”.) They often say yes but then turn around and do what they want anyway.

You tell them “Give this employee a raise.”  They accidentally don’t do it because they don’t agree that that person should get the % increase you decided on.

One of the biggest causes for embezzlement is opportunity to withdraw or control funds without any checks and balances.  BEWARE OF: Dedicated hard-working bookkeepers that never take a vacation.

What do you do if you find yourself in this situation?

Get your power back or let go of the bookkeeper.  Unfortunately, they usually have a hold on that too.  No one else knows how to do payroll, or where the petty cash box is or the keys to the car. Or the title to the cars, etc. etc. etc.,

It’s not easy to put checks and balances on the bookkeeper because you don’t have enough time and you don’t have enough staff to institute the proper checks and balances.

Hopefully in this age of technology you can check your business checking account online.  You can make sure your decisions are being executed.  The biggest suggestion is don’t give them all the power, spread it around.  Watch out for excuses and take responsibility for reviewing things monthly (at a minimum).  They may have abused the power but you gave it to them.