How do you catch fraud and errors in property management accounting?

2 Implement internal controls

Implementing internal controls is another way to catch fraud and errors in property management accounting. These policies and procedures govern how you perform, record, and report your accounting activities. For instance, you can segregate duties and responsibilities among different staff members, to ensure no one person has complete control over a transaction or process. You should also establish approval and authorization levels for different transactions or documents to verify and monitor their validity and accuracy. Additionally, it’s important to maintain proper documentation and records for all transactions and processes, so that you can track and audit them easily. Finally, using secure and reliable software and systems can automate and streamline your accounting tasks, while providing backup and recovery options.

4 Hire a professional accountant or auditor

A fourth way to catch fraud and errors in property management accounting is to hire a professional accountant or auditor who can review your accounting records and processes independently and objectively. A professional accountant or auditor can help you verify the accuracy, completeness, and compliance of your accounting information, and identify any errors or fraud that you may have missed or overlooked. They can also provide you with recommendations and solutions on how to improve your accounting practices and prevent future errors or fraud. Hiring a professional accountant or auditor can help you enhance your credibility, reliability, and reputation.

5 Educate yourself on common fraud schemes

Educating yourself on common fraud schemes is a fifth way to catch fraud and errors in property management accounting. Fraud schemes are deliberate and dishonest acts that aim to deceive or manipulate you or your clients for personal gain. Examples of these schemes include skimming, which is stealing cash or checks before they are recorded or deposited; fictitious or inflated invoices, which are creating or modifying invoices to overcharge or divert funds; check tampering, which is altering or forging checks to change the payee or amount; vendor or tenant fraud, which is colluding with vendors or tenants to split or kickback funds; and identity theft, which is using someone else's personal or financial information to access or open accounts. Knowing about these schemes can help you recognize and avoid them, thereby protecting your business and clients.