Here are three safeguards to take.
1. Accept no postdated checks.
Believe this: Most of them will bounce.
If the check writer refuses to pay, you can go to court.
But there’s a major legal danger.
The judge may rule against you for taking the check.
You knew there were insufficient funds.
What made you think the money would be there later?
Make sure anyone else knows this is your policy.
Make sure they check dates on checked received.
By mail or at the front counter.
Any make sure they are signed.
A favorite ploy is mailing an unsigned check.
2. Watch for changes in behavior.
Is your bookkeeper acting differently?
Has there been a crisis in the bookkeeper’s family?
A sudden need for cash in an emergency?
Is she receiving emergency personal phone calls?
Has the bookkeeper just bought a new car?
Has she upgraded her wardrobe dramatically?
These are warning signs.
Keep a careful eye on anyone who handles cash.
The same goes for checks and credit card payments.
3. Make sure payroll taxes are paid.
As the owner, this is your responsibility.
Check to make sure these are paid weekly.
Both federal and state payroll taxes.
This is complex so get advice from your CPA.
State and federal tax officials are not forgiving.
They don’t want to hear your excuses.
We once walked away from a business sale.
The sellers owed five figures in back taxes.
We did not want tax people seizing our assets.
Either they paid the taxes or we weren’t interested.
A deadline for tax clearance came and went.
We cancelled the closing.
I don’t think they ever resolved it.
They closed the business months later.
Don’t let this happen to you.
Next: Leadership in tough times.
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