HVACR Business

JUN 2017

Help hvacr contractors master the critical components of business management.

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7 HVACR BUSINESS JUNE 2017 www. hvacrbusiness .com one did the books. It was the perfect start- up because each manger was focused on a critical area of business. ey decided two signatures were nec- essary for any check that was written on the company bank account. e thinking was that two signatures would make all owners aware of money going out of the company. One of the owners started to have health problems and was not present in the business as much. ey decided to have a signature stamp made of his signature and gave it to the partner who was responsible for the financial segment of the business. is was the wrong person to give the signature stamp to because, as it turns out, this partner was embezzling at least $50,000 a year from the business. How did he do it? Whenever he wrote a company check, he had two signatures: his and the signature stamp. He coded the check to whatever he felt would not be noticed. Fiy thousand dollars is less than $1,000 per week. Usually he coded it to things that would not be noticed because the expenses were large as a rule. What caught my eye when reviewing the company's financial statements is that he coded some checks to penalties. I knew the company paid their payroll taxes on time, so I started investigating … when he was not there. I found the checks from the bank statements and knew what was going on. Going back at least a year, the the added up to more than $50,000. Quite frankly, it was probably more but I was sick to my stomach and quit investi- gating there. I told the two other partners and showed them the proof. eir comment was that they were not going to prosecute him because they were in a small town and couldn't stand the embarrassment. In fact, they didn't fire him either. I quit. If they didn't care enough about their money, then I couldn't help them. Keeping the embezzler there only meant he'd find another way to steal from the company. Please do not use signature stamps. If you require two signatures on checks, there should be two signatures, not a sig- nature and a signature stamp. Another check: review financials every month. ey trusted the financial partner and never looked at the statements each month. Had they done so, they might have seen the penalty expenses and ques- tioned them. u Ruth King is president of HVAC Channel TV and holds a Class II (unrestricted) contractors license in Georgia. She has more than 25 years of experience helping contractors, distributors and manufacturers grow their companies. Contact her at ruthking@hvacchannel.tv. If you require two signatures on checks, they should be two signatures, not a signature and a signature stamp. REFCO Manufacturing (US) Inc. 66 B Industry Avenue Springfield MA 01104 Phone: 413 739 4761 Fax: 413 733 9267 sales @ refcoswiss.com www.refcoswiss.com REFCO has all the products you need for your daily HVAC/R business. 24/7 customer service: 800 848 4232 ED31 REF-VAC Vacuum gauge REF-LOCATOR High-end leak detector OCTA-WIRELESS Electronic charging scale DIGIMON-SE patent pending Two-way and four-way digital manifolds ENVIRO/ENVIRO-DUO Recovery machine for all popular refrigerants BM-Series Swiss manifolds New with both UV- and LED lights HY-EX-6 Hydraulic Expander tool kit

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