In an attempt to make their bookkeeping software easy to use, many software products do not include the kinds of controls that make it difficult to make mistakes and embezzle funds. Two common examples are:
Checks to not have to be voided and accounted for they can just be ignored.
The name a check is made out to can be easily changed so that the pay to in the check register is different than the person to whom the check was actually paid.
These are bookkeeping NO NOs that the bookkeeping software I have used (the big three) have chosen to ignore.
I started to do bookkeeping for my Great Aunt’s company in the old one-write manual system days. We ordered our bookkeeping supplies from Safeguard systems, but there were other one-write systems. These systems featured a carbon strip on the back of every check that recorded onto a check register so that you could not pay a check to someone different than the name recorded in the check register.
With the old one write manual systems, each check number was pre-recorded in the check register so there was no way a check would be voided without being accounted for. Voided checks are an often used method for embezzling funds these days according to the Sonoma County CA DA.
Every law practice or other business that not does not have an independent person review the cleared check with the check register and the check number series is vulnerable to accidental and non-accidental mistakes.
Because software produced entries can be so easily edited there are other vulnerabilities in software bookkeeping systems that allow for hanky panky. When you decide to use software for bookkeeping, make sure you have goal in mind for improving your bookkeeping or making it easier to do the job right, not just easy. It seems weird in this day and age to suggest that writing manual checks might be faster, easier and safer but that might be the case for you in a small law office.
