If the average age of your receivables is suppose to be 40 days and it is slowly rising to 60 days, it may be a sign that an employee is taking cash received from your customers and put them in a similarly named bank account controlled by the employee. Then the person makes use of the money for his own purposes for a couple of weeks. Businesses with a great deal of cash, such as fast food restaurants and grocery stores, need to have special controls in place to ensure all the money is going into the till. Inventory loss is another area that requires diligence. Make certain that you count inventory on a regular basis.
Some businesses count high-value items daily.
No system is perfect nor will any system stop collusion between two employees. The key is to determine the dollar value of your assets that may be at risk in your business and keep the level of risk to a very low level. The obvious areas to emphasis are at the point that cash comes into the company or where cheques are issued. Make certain that you receive a daily tally of cash received from the person opening the mail - you can then compare it to the deposit slips if necessary. Signing all the cheques yourself is a good way to control expenditures, but for bigger firms you may have to delegate this to two or more individuals.