Truck Parts and Service | Heavy Duty Trucking, Aftermarket, Service Info
Issue link: https://read.dmtmag.com/i/123976
Inside the Numbers A breakdown of trust? By Avery Vise avise@randallreilly.com H ave you noticed any customers paying more attention than usual to your transactions lately? Probably not, but you certainly could understand why if they did. In a development you might have overlooked as not affecting you directly, the FBI last month raided the headquarters of Pilot Flying J — the nation's leading truckstop chain — as part of an investigation of claims the company withheld millions of dollars in diesel fuel rebates from fleets. An FBI special agent's affidavit used to obtain a search warrant for Pilot Flying J headquarters claimed the truckstop chain had targeted primarily smaller fleets the company considered to be unsophisticated and unlikely to discover that they were being shortchanged. In an age where virtually all transactions involve a computer at one or more stages, it can be tempting to assume that everything must be correct. But just because a transaction is digital doesn't mean it's right, and it could just be a glitch, not fraud. One day last month I found myself staring at a screen at a Walgreens checkout counter, carefully auditing the prices of items as they rang up to ensure that I got a particular discount on pistachios. I suspect that a surprising number of companies pay less attention to transactions than I had in trying to save $3 on a bag of nuts. Regardless of how small your business is, there's no excuse for inadequate internal controls or for failing to fully understand the contracts you sign. You certainly know this to be true, but it's easy not to worry about it. Many owners say they built their businesses on trust. And for many of your customers, this is probably literally true. A trucking company typically provides transportation services without any expectation of payment for 30, 45 or maybe even 60 days. This arrangement frequently makes them a target of fraud, especially by unscrupulous brokers. It's one reason why Congress recently increased the size of the bond brokers must post. Devote – and expect – greater scrutiny of business practices Regardless of the size of your operation, you probably have adopted appropriate and effective methods for securing truck parts and shop tools. You wouldn't be in business very long if your products — or the means of installing or repairing them — frequently disappeared without explanation. But have you paid as much attention to the security of your money as you have to the security of items? Sure, you probably reconcile cash register receipts and any other areas where money routinely changes hands. But what about your payables or payroll? In many small operations, you or a family member might control these transactions. But in larger operations, it may be possible for a well-placed employee to invent vendors or employees for the purpose of misappropriating funds. The following are some tips to keep your finances under lock and key: • Conduct full background checks on anyone who has access to bank accounts, corporate credit cards or cash. • Require employees to take vacations and have other employees perform the duties of those employees in their absence rather than have the work wait for their return. • Ensure that any incoming funds are first logged by someone other than the person responsible for accounting for and depositing them. • Don't let the same person authorize new employees and payroll expenditures or authorize new vendors and payments to vendors. Otherwise, someone could create a fictitious employee or vendor and pocket the money. • Don't give any employee sole discretion over all transactions. • If you have company vehicles, randomly verify drivers' fuel consumption and audit their use of fuel cards. Technology can help you maintain adequate controls, but often the most effective tools are just taking the time to review important transactions and setting up policies and procedures that make fraud more difficult. Avery Vise is executive director, trucking research and analysis for Randall-Reilly, publisher of Truck Parts & Service. 40 T R U C K PA R T S & S E R V I C E | TPS0513PG040_Avery.indd 40 May 2013 4/22/13 1:00 PM