
In a shocking revelation, Macy’s recently disclosed that a single employee had made unauthorized accounting entries to conceal expenses. According to Barron’s, this employee hid between $132 million and $154 million in delivery expenses over a three-year period, impacting Macy’s financial reporting for several quarters. While the company has since identified and addressed the issue, the incident highlights the critical importance of hiring qualified professionals and maintaining stringent oversight of your expenses.
The Cost of Missteps in Accounting
Errors—or, as in Macy’s case, deliberate misreporting—can have far-reaching consequences. This scandal delayed the company’s fourth-quarter earnings report and contributed to a decline in stock value by over 2%. According to Business Insider, auditing experts believe this incident reflects a failure in internal controls, a situation that could have been avoided with stronger financial oversight.
For small and mid-sized businesses, the stakes are even higher. A single accounting error can lead to cash flow issues, eroded trust with stakeholders, and potential legal ramifications.
Hiring the Right Talent: A Critical First Step
Preventing accounting mishaps starts with building the right team. Macy’s has already terminated the employee responsible for the discrepancies, but businesses of all sizes should take proactive measures to ensure this doesn’t happen in the first place:
Focus on Integrity and Competence: Ensure that your accounting team not only possesses the necessary qualifications but also adheres to high ethical standards.
Background Checks and Verification: Hiring processes should include background checks and validation of an applicant’s expertise and certifications.
Ongoing Education: The financial landscape changes rapidly. Your team should be committed to ongoing professional development to stay ahead of regulatory changes and technological advances.
Know What You’re Really Dealing With in Expenses
Once the right team is in place, the next step is to maintain consistent oversight and a thorough understanding of your expenses. Here’s how:
Implement Robust Internal Controls: Segregate duties so no single employee has control over the entire expense approval and reporting process.
Regular Financial Reviews: Engage an independent accountant or auditor to review your financials regularly. As Macy’s story shows, third-party reviews are often essential to catching anomalies.
Leverage Technology: Use accounting software with built-in checks, such as audit trails and automated reconciliation tools, to minimize human error and intentional tampering.
Foster a Culture of Transparency: Encourage employees to raise concerns and report issues without fear of retaliation.
Why This Matters
As Macy’s situation demonstrates, even a large organization with robust resources is not immune to financial discrepancies. For smaller businesses, a similar mistake could be catastrophic. Protecting your financial integrity ensures your business can grow confidently, attract investments, and maintain trust with your stakeholders.
You don’t have to navigate this alone. If you’re unsure whether your current financial practices are as strong as they should be, reach out to us at Rocheleau Bookkeeping. We specialize in helping businesses establish solid financial foundations through strategic bookkeeping and accounting practices. Let’s work together to build trust and transparency into your financial reporting.
For more details on Macy’s recent scandal, check out these articles:
By learning from these high-profile mistakes, businesses can better safeguard their own financial health and future.

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