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Two Great Ways to Protect Your Money

Originally published: 06.01.17 by Ruth King

Putting systems in place keeps the honest people honest. I discovered this really sneaky and ingenious way to steal from your company when a contractor called me and asked if I would help him make sure his pricing was correct.

Keeping your hard earned money safe is your responsibility as the owner of your company. You shouldn’t be giving it away, nor should you make it easy for anyone to simply take it from you.

Here are two ways to protect your hard earned cash.

Don’t Give Out Bonus Checks

Many HVACR contractors give employees bonuses based on ompany profitability. Many owners give the bonus after the Christmas holidays because they don’t want employees to think it’s a “Christmas Bonus” that should be expected, even in years where company profitability is not good.

For one company, the bonuses were large this year because the company was highly profitable. It was fun for the owner to share the profits with the employees. They had a company meeting where we handed out the checks.

Unbeknownst to the owner, one of the employees was so thrilled with the amount of his check that he bragged to all of his friends about it. How did he brag? The same way everyone brags nowadays: he took a picture of his check and posted it on Facebook!

And yes, the check amount, account number and bank routing number were clearly visible on the picture.

He got a call from the banker who questioned some large withdrawals from the company’s bank account to an unusual location. The owner told him they didn’t authorize any withdrawals and the banker immediately shut down their accounts. Luckily, the theft was caught in time before too much damage was done.

When they investigated, they found out about the Facebook post.

The owner told the employees what happened, but didn’t say who did it.

From now on, bonus checks will be direct deposited into employees’ bank accounts so this cannot happen again.

It’s important to note, employees who are emotional do not think rationally. This employee wanted to prove to his friends that he got a great bonus. He wasn’t thinking about the consequences when he snapped a picture and put it on Facebook.

Consider direct deposit for your payroll checks too. When you use direct deposit, employees get a notice of their gross wages and deductions. They see that a certain amount was put in their account. Employees cannot see the company’s checking account and bank routing numbers.

If direct deposit is not an option, have a separate payroll account where you keep only enough money in it to fund payroll each period. Then, if an employee puts a picture of his payroll check on Facebook, the hackers can get little or no money.

Don’t Use Signature Stamps

Three HVAC industry personnel decided to open their own business. One was focused on sales, one on operations and one did the books. It was the perfect start-up because each manger was focused on a critical area of business.

They decided two signatures were necessary for any check that was written on the company bank account. The thinking was that two signatures would make all owners aware of money going out of the company.

One of the owners started to have health problems and was not present in the business as much. They decided to have a signature stamp made of his signature and gave it to the partner who was responsible for the financial segment of the business.

This was the wrong person to give the signature stamp to because, as it turns out, this partner was embezzling at least $50,000 a year from the business.

How did he do it? Whenever he wrote a company check, he had two signatures: his and the signature stamp. He coded the check to whatever he felt would not be noticed. Fifty thousand dollars is less than $1,000 per week. Usually he coded it to things that would not be noticed because the expenses were large as a rule.

What caught my eye when reviewing the company’s financial statements is that he coded some checks to penalties.

I knew the company paid their payroll taxes on time, so I started investigating … when he was not there. I found the checks from the bank statements and knew what was going on. Going back at least a year, the theft added up to more than $50,000. Quite frankly, it was probably more but I was sick to my stomach and quit investigating there.

I told the two other partners and showed them the proof. Their comment was that they were not going to prosecute him because they were in a small town and couldn’t stand the embarrassment. In fact, they didn’t fire him either.

I quit. If they didn’t care enough about their money, then I couldn’t help them. Keeping the embezzler there only meant he’d find another way to steal from the company.

Please do not use signature stamps. If you require two signatures on checks, there should be two signatures, not a signature and a signature stamp.

Another check: review financials every month. They trusted the financial partner and never looked at the statements each month. Had they done so, they might have seen the penalty expenses and questioned them.



About Ruth King

Ruth King

Ruth King has over 25 years of experience in the hvacr industry and has worked with contractors, distributors, and manufacturers to help grow their companies and become more profitable. She is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. Ruth has written two books: The Ugly Truth About Small Business and The Ugly Truth About Managing People. Contact Ruth at or 770.729.0258.

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