Every good accounting system will weave a set of internal controls throughout the system. Several businesses have been set back or forced out of business due to employee theft or embezzlement. The following are areas in which to create internal control policies:

1. Create a written set of documents which describes your internal controls in detail.
2. Periodically review the internal control policies and update when needed.
3. Require all employees to take a week's vacation each year as this greatly helps uncover any fraudulent activity.
4. Cross-train all employee job duties to provide coverage when employees are sick or on vacation. This also helps to uncover fraudulent activity.
5. Perform background checks before hiring new employees.
6. Use dual control in job functions such as having one person prepare check payments and having another person sign the checks while reviewing the vendor invoices.
7. Ask your outside accountant to perform unannounced spot audits.
8. Thoroughly investigate your outside accountant, just as you would hire a new employee.
9. Backup your computer system regularly and rotate the backup tapes.
10. Use qualified, trained and trustworthy employees to monitor the cash-related procedures.