Occupational fraud is an unfortunate reality for just about every employer, nonprofit organization or otherwise. But you might be able to reduce the risk of costly losses if you understand some of the common traits of fraud perpetrators. The 2016 Report to the Nations on Occupational Fraud and Abuse from the Association of Certified Fraud Examiners ("ACFE") provides some useful insights on these characteristics.
Accounts receivable is often one of the most significant assets on a manufacturer’s balance sheet. However, the faster you’re able to convert receivables to cash, the sooner you’re able to pay suppliers, employees, and lenders — and the less likely you’ll be to draw on your line of credit to make up for working capital shortfalls.
Operating reserves aren’t a luxury — they’re a necessity for financially savvy nonprofits. Organizations without adequate operating reserves leave themselves vulnerable to the financial instability and damaged reputation that interruptions in incoming revenue might bring.
Knowledge Is Your First Line of Defense
Inventory is one of the biggest assets on a manufacturer’s balance sheet. It’s also one of the hardest assets to measure and track. Thousands of transactions flow through the inventory account each year—and many of these journal entries require subjective estimates, such as overhead allocations, write-offs, and valuation adjustments. In addition, many employees have direct daily access to inventory or inventory accounting records, providing an ongoing temptation to steal or cook the books.
Topics: Manufacturing & Distribution
Although budget approval is one of the more important roles played by a not-for-profit’s board of directors, not every board member is a savvy businessperson used to budget work. At least some board members might be unfamiliar with key budget terms. And there’s even a greater chance that they’re reluctant to admit clarification is needed.