THE BEST BOOKKEEPER

In some 25 years running my own business, the best bookkeeper I ever had was fast, accurate and thorough.  She seemed right on top of everything all the time.  She never made waves of any kind.  She was terrific.

The only problem was that at one point we discovered she embezzled a lot of money.  She was so good, she devised a clever scheme to cover her embezzling, at least for a while.

When I hired her, she told me she previously worked for a real estate firm and for UCLA.  Tried getting references from both places, but neither would say much.  We later learned why.

One weekend I was out of town working at one of our Woodworking Shows and got a call from Randy, the publisher of our Association News, Trade Magazine.

He told me something very peculiar seemed to be going on.  In looking to see if one of the magazine’s advertisers had paid for their last ad, he discovered a bunch of checks setting in the bookkeeper’s desk drawer.  A lot of them were dated more than a month ago.  Appeared very unusual since we deposited checks at least once a week.

Monday morning we got to the office very early and found dozens of checks just lying openly in her drawers.  That was her only mistake.  If she had put them in an envelope and buried them somewhere, we would have had a lot of difficulty uncovering the problem.

After a lot of checking of bank deposits, show cashier reports, and advertiser invoices, we finally figured out what was going on.  We would come back from a weekend show with say $10,000 to $20,000 in cash.  The bookkeeper would match up enough checks she was holding to fill up what we expected to see deposited from the show.  She then took the cash.  Maybe a total of $20,000 or $30,000.  It was hard to tell exactly how much.

Not satisfied with the cash, she borrowed the numbers from one or two of the company’s credit cards and treated herself to some shopping at Lane Bryant.

Later that morning when we confronted her with the problem, she didn’t deny it.  She was calm and collected and said, “I’ll give you the pink slip to my car.”  At that point, the car was worth maybe $500.  Not even close to what we estimated she stole.

Our lawyer said, “Don’t take the car.  You may not legally be entitled to it.”  When we contacted the Police and the City Attorney’s office, they both said they had bigger fish to fry.

So we licked out wounds and tried to put in some new procedures to avoid further problems.  On advice of our accountant, we set up the following procedure:

  1. Who ever brought the cash back from a weekend show gave it to the overall show manager with a cc of the ticket sales recap.
  2. The show manager gave the cash to the bookkeeper and got a receipt, which was stapled to the ticket recap report.
  3. All checks received in the mail were first given to the show manager or publication publisher, who checked off the receivables in the monthly computer printout
  4. A copy of all deposit slips was given to the show manager and publisher.

Almost three years went by and we got a call from our ex-bookkeeper.  Seems she pulled the same stunt with her next employer, got caught, and had to serve a little time.  She was now on probation and ordered to try and make restitution.

She came by to deliver the car we had the pink slip on.  It was now a total wreck and we got $200 for it.

She drove off in what looked like a brand new car.

An exhibitor friend regularly teased me about having all that unreported cash from our woodworking shows.  I could never convince him that we had to take some strong steps to make sure no one (including me) took the cash.

ArtSchwartzSig

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1 Comment

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One response to “THE BEST BOOKKEEPER

  1. Paul

    In order to avoid instances like this happening (but sometimes in substantially larger numbers) the securities industry (at least our firm) never took anything greater in cash than $50, and even hated to take that.

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