Financial Fable: Embezzlement at The Sunshine Factory – Why You Should Be Reviewing your Bank Statements Every Month

Coffee and phone

“You have one new message,” droned the robotic voice. “First new message, sent Wednesday, March 1st, 2017 at 9:17 am from 217-867-5309”

“Uh, yeah, Katie?  Hey, it’s Jenny from The Sunshine Factory.  Listen, our bank started sending me paper statements again….I think some setting got changed when they updated their system a couple weeks ago.  Anyway, I was looking through the check images and noticed there is a check written to our bookkeeper that I don’t remember writing.  I looked back at the check listing I approved for that week, but it shows that check number was paid to one of our biggest suppliers.  I’m not sure what’s going on, but I’ve got a bad feeling about this.  Could you give me a call as soon as you get this?  Thanks. Bye.”

“End of message.  To delete this message, press…”

Katie quickly hung up and tapped the call-back button on her phone.  She got Jenny’s voicemail.

“Hi Jenny, it’s Katie.  I agree with you, something’s not right.  I’ll come by this afternoon to look at what you’ve found.  In the meantime, call your attorney and give her a heads-up.  I have a feeling we may need her.”


Reviewing the bank statement is important for every business owner or nonprofit director.  Especially if there is someone else paying the bills.  One of the most common types of fraud is what happened to Jenny above.  The bookkeeper prints a check payable to themselves.  Then before running any reports, they change the vendor name on that check in the software.  If they have access to a signature stamp, they can sign their own check, and no one would ever see it. Regularly reviewing check images provided in the bank statement is one of many ways to protect you and your business from embezzlement.  Contact me if you would like to learn more way to protect your business or nonprofit organization.

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