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June 10, 2021


Examine credit card statements and corresponding receipts each month, independently, to determine whether charges are appropriate and related to agency business. This generally is harder to pull off, because overdue accounts appear on the accounts receivable aging schedule. Employees may try to cover their thefts by “lapping, or borrowing money from one account to make up for a shortage in another. Let’s look at how this fraud scheme works so you can prevent it from happening to your company. Physical inventories should be done annually by individuals who are not responsible for inventory records. Some businesses also install security devices to monitor merchandise or inventory.


One of the major Cash Receipts Theft Prevention cycles in every establishment is sales and cash receipts. Cash receipts, cash disbursements, and payroll are common areas of employee embezzlement as these areas are where the cash flows. Certain cash controls should be in place regardless of the size of the business.

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A lapping scheme is a form of accounting fraud whereby stolen or misappropriated cash is obscured by an employee who altes the accounts receivable. From start to finish, my experience with Home Bank of California was smooth. I truly felt like Theo Daniels and the whole team took the time to understand my business needs, working closely with me every step of the way to reach my desired outcome. Their staff and services are attentive, professional, and highly personalized. As a business owner myself, these qualities are not only deeply important in terms of client relationships, but they are also greatly appreciated when navigating any banking process.


Individuals who reconcile bank or other financial accounts should not also issue checks and/or process transfers into or out of financial accounts. The key to preventing or reducing the risk of fraud is having strong controls in place. It also helps to know what schemes and red flags to look for. Most companies tend to overlook larceny because employees tend to steal small amounts that may not have a significant effect on the overall revenues. However, when the practice is allowed to continue, the small amounts may sum up to become material amounts that will push the company into financial distress. • Customers involved in voided sales and refunds should be randomly contacted to verify the accuracy of the transactions.

How to Detect Lapping Schemes

If applicable, owners may also involve themselves personally in payment processes. Many small businesses or franchise locations only have one or two employees at a time who are responsible for running the entire store. Keep risks of theft low by separating accounting from their duties.

Criminals use Telegram to recruit ‘walkers’ as America’s big banks see an 84% increase in check fraud – CNBC

Criminals use Telegram to recruit ‘walkers’ as America’s big banks see an 84% increase in check fraud.

Posted: Mon, 06 Feb 2023 08:00:00 GMT [source]

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