Thank you for using our service. My name is XXXXX XXXXX X would like to assist you today.
While there is no legal requirement (case law or statutory), from experience in litigating dissolution matters or accounting issues (including improprieties), the use of an impartial third party bookkeeper is invaluable to achieve this goal.
Many businesses will use one service to do their books and have a different service do periodic audits (depending on the size and nature of the business, this periodic audit may occur over a period of annually or more sporadically).
A lack of audits and a reliance on a single individual to control all finances are generally the hallmarks for future dispute and allegations (both well founded and simply perceived) of embezzlement or other impropriety.
I hope the above is helpful, if you have any questions please do not hesitate to let me know and I will follow up quickly.
Thank you for using our service, please do not forget to rate my answer when you are satisfied. I am going to transfer our conversation to the "Q&A" format to ensure you can review the entire response (some customers have browser interface issues and I want to avoid any delay) and that I can follow up to any questions you may have quickly. I do wish you the best of luck in this matter.
Your other alternative is the audit. You can use audits either at random or at intervals to ensure bookkeeping is consistent and that it reflects the income and expenditures reported by the financial partner (and the business - as well as taxes). There are different levels of audits (both in cost and detail) that you can choose from.
In my experience, a combination of the external bookkeeping and the audit are the best way to prevent this type of conduct, but there is never a sure solution (I have litigated cases where the bookkeeping firm was the embezzler - it was a unique situation, but not entirely unusual).
If the financial partner's role in the company is to do the books, and outsourcing this to another person, or business does not make good economic sense, you may want to consider as a good option rotating through audits - not using the same company each time, and occasionally using an audit that is more thorough than the one preceding and following it.
There are many different ways to take on this sort of risk management. My background makes me somewhat more risk adverse than some others, but as long as you reach a comfortable balance between having a 3rd party looking at the books without making it so you can no longer make a profit, you are usually in the right spot. There are risk management firms that you can hire to get consultations for your business and other such resources that can provide you with specific information for your business that I cannot through this "chat" format, but getting some greater oversight over your finances is probably a good idea for everyone (even your financial partner).
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).