Business Manager Controls Bank Access Alone - Traps & Scams Every Musician Must Avoid

Quick truth bomb. If your business manager has the only set of keys to your bank account your money is at risk. This is not paranoia. This is a reality check that you, your band, or your crew need right now. In this guide you will learn the classic traps, the scams you will probably see, how to lock your financial life down, and the exact steps to take if someone already pulled a fast one on you.

This article is written for artists who would rather be writing hooks than reconciling bank statements. You will get clear definitions for every jargon word, real life scenarios that actually happen, contract language you can steal, a step by step emergency plan, and a checklist so crisp you could eat it. If your manager is the only person who can move money you need to read this now.

Why handing bank access to one person is a disaster waiting to happen

This is obvious to accountants and lawyers but not obvious to creatives who trust their team with their life and their playlists. Control equals power. If one person has sole access they can do a lot before anyone notices problems. People make honest mistakes. People also make opportunistic choices when they have access and the account is not visible to anyone else.

Real life scenario. You are on tour. Your manager says they will handle deposit of the ticket money and pay expenses. You trust them. They set up an account under a company name you barely remember and they are the only signatory. Weeks later your rent is unpaid, your merch printer never gets paid, and your tour van lease is flagged for non payment. You ask for bank statements and you get excuses.

Here is another version. A manager promises to be your financial buffer. They ask to be given sole online control to make payroll and pay vendors. They set up recurring transfers to vendors that are actually their side projects, and they start directing checks and wire transfers to an LLC they call Tour Ops. You see payments going out but not where they landed. That LLC is really their personal company. By the time you notice the money is gone.

There are also non sneaky ways to get burned. A manager with sole control could simply be incompetent. Taxes get missed. Royalties are unclaimed. Payroll taxes go unpaid. Late fees and penalties pile up and then the IRS shows up for a conversation you will not enjoy.

Important terms explained so you do not sound ignorant in court or at a sugar coated meeting

• Business manager A person or company hired to manage finances and operations for an artist. This can include paying bills, collecting income, making budgets, and sometimes negotiating deals.
• Signatory The person whose signature is required to authorize transactions or who is listed on the bank account as someone who can sign checks and approve transfers.
• Power of attorney or POA A legal document that gives someone the authority to act on your behalf for financial matters. POA can be limited or broad. Limited POA might only allow paying bills. Broad POA can allow nearly any financial action.
• CPA Certified Public Accountant. This is a licensed accountant who can prepare taxes, advise on finances, and perform audits.
• LLC Limited Liability Company. A business structure that can hold accounts and contracts.
• ACH Automated Clearing House. This is the electronic network used for bank to bank transfers in the United States. It is how direct deposits and many vendor payments clear.
• Forensic accounting The investigative practice of reviewing financial records to find fraud or mismanagement.
• PRO Performance Rights Organization. They collect performance royalties for composers and songwriters. Examples include ASCAP which is the American Society of Composers Authors and Publishers, BMI which is Broadcast Music Incorporated, and SESAC which is now privately owned. If money is missing from PRO distributions you need to check registrations.

Classic scams and traps when one person controls the account

Here is a list of the scam playbook. If any of these sound familiar you should stop cooperating immediately and get an expert.

1. The Shell Company Shuffle

The manager sets up an LLC that sounds like a vendor. Payments that should go to real vendors go to this LLC. The manager is the owner of the LLC. On paper this looks like a vendor expense but in reality the money flows to the manager personally.

Scenario you will relate to. You hire someone for a music video and your manager tells you they already paid the director through their company. You see a line item in the bank transaction that says Video Services LLC. You fire the director and start to do your own checks. The director sends you an invoice that was never paid. Your manager has paid themselves and the director never saw a dime.

2. Fake Invoice Game

Manager receives or fabricates invoices then pays them out of the artist account. The invoices can be for marketing, studio time, or travel. Often the invoices are cheap but they are regular. Over time the small amounts add up.

Scenario. You notice monthly payments to a firm named Growth Media. Growth Media never produced reports or ad creative. When you ask the manager they claim it was a subscription. You ask for contracts and they say they misplaced them. That is a red flag.

3. POA Abuse

Power of attorney is a legitimate tool. But a broad POA in the wrong hands is a giant open door. A manager will ask for POA so they can act quickly while you are on the road. You sign in trust and then they use it to move money and sign contracts without your knowledge.

4. Advance Laundering

Managers sometimes receive advances from labels, promoters, or sync deals directly into an account they control. They then disburse a fraction to you and keep the rest. Label accounting can be slow so this can be masked for months.

5. Unauthorized Loans or Guarantees

A manager uses the artist account to fund a loan to a third party or guarantees a debt without telling the artist. If the loan goes bad your account is on the hook and you are blindsided.

6. Withholding Taxes and Payroll Fraud

Manager pays band members and employees but does not withhold payroll taxes. Or the manager pays themselves as an employee without appropriate documentation. When tax season arrives you may owe penalties and interest.

7. Chargeback and Refund Cover Ups

Manager transfers money to an account and then later creates a fake refund entry to reverse it on paper. The money is gone but the books look tidy. These are harder to detect without reconciliations and vendor confirmations.

Red flags you must not ignore

• Only one person has online login or signatory rights for the account.
• There are monthly payments to entities you do not recognize.
• Recurring transfers to a personal account that is not yours or the company’s.
• Manager resists third party audits or refuses to provide bank statements promptly.
• Requests for a broad power of attorney with vague language about why it is needed.
• Invoices that are missing contracts, scopes of work, or contact details.
• Manager pushes for the artist to be excluded from bookkeeping access or account alerts.

How to set up safe financial controls for your music business

Think of financial controls as the safety rails on your tour bus. They are not glamorous. They keep the bus from rolling into a ravine. You want processes that are easy enough to live with and strict enough to stop theft.

Two signatures on important accounts

Always require two signatories for large transactions. A common structure is for the manager to have day to day payment rights up to a specified threshold and then require a second signatory for higher amounts. The second signatory can be the artist, a bandmate, or a trusted advisor such as your CPA or a band business manager you bring in as a check.

Separate accounts and clear roles

Create separate bank accounts for operating expenses, payroll, taxes, and savings. This compartmentalizes risk and makes it harder for someone to sweep funds. For example, have one account for gig income, one for label or royalty income, and a dedicated tax account where a fixed percentage is transferred each time income hits.

View only access for artists

Ask the bank for view only online access. This allows you to monitor balances and transactions without the ability to move money. You can set up daily or weekly alerts for any movement over a dollar threshold you choose. Many banks allow SMS or email notifications every time a transaction posts.

Credit cards with controlled limits and virtual cards

Give the manager a corporate card with a low limit for day to day expenses. Use virtual credit cards for vendors where you can set a one time charge or expiration date. This reduces the risk of recurring charges to vendors you never approved.

Expense approval policy

Create a written expense policy. Specify what can be approved by the manager and what needs your sign off. Define categories such as travel, accommodation, gear, creatives, and promotion. Set dollar limits for each category and require receipts for every transaction above a small amount.

Payroll through a third party

Use a payroll service or a professional employer organization for paying employees and contractors. This ensures payroll taxes are calculated and remitted correctly. If your manager says payroll is too expensive use this as a red flag. Payroll messes are expensive when ignored.

Quarterly reconciliations and bank confirms

Perform monthly or quarterly bank reconciliations where someone independent compares accounting records to bank statements. Require vendors or big payees to confirm payments directly to you periodically. This makes fake invoices and cover ups harder to hide.

Contracts and clauses you must include now

Do not sign a manager agreement that touches money without these clauses. This is not negotiable. Consider copying this language into your manager contract and run it by a lawyer who represents artists.

Sample clause 1: Dual signatory banking

All operating accounts for the Artist shall require two signatures for any transfer or disbursement greater than an agreed amount. The names of the two signatories shall be: the Artist and a designated independent financial officer chosen by the Artist.

Sample clause 2: Expense authorization list

The Manager may approve expenses up to a specified dollar amount for recurring categories. Any expense in excess of that amount or outside the listed categories requires prior written approval from the Artist. The Manager shall provide copies of all invoices and receipts within five business days of payment.

Sample clause 3: Bank access and POA restrictions

The Manager shall not be granted any broad power of attorney for the Artist’s personal or business accounts without express written approval from the Artist and the Artist’s legal counsel. Any limited POA must terminate automatically upon termination of the Management Agreement.

Sample clause 4: Audit rights

The Artist has the right to audit the Manager’s handling of funds related to the Artist with a certified public accountant at least once per year at the Artist’s expense if the Manager provides timely access. If the audit reveals material misappropriation the Manager shall reimburse audit costs and return misappropriated funds within a specified time.

Sample clause 5: Transition of accounts on termination

Upon termination of the Management Agreement the Manager shall provide an immediate full accounting of all funds and transfer control and access to all bank accounts within five business days. The Manager shall not retain access unless expressly agreed in writing by the Artist.

These clauses are starting points. Your lawyer will tailor them based on your situation. Use them. Do not be polite about this. Money is not a personality contest.

How to audit and detect problems before they become catastrophes

Good audits are not detective work only. They are routine. If you treat financial review as a one time event you will lose money. Make reviews normal.

Monthly bank reconciliation

At least once a month reconcile bank statements to your accounting software. Reconciliation means matching every transaction on the bank statement to a ledger entry. Missing matches are where the badness hides. If you do not have accounting software this is the time to get it. Popular simple options for small businesses include QuickBooks and Xero. QuickBooks is often used in the United States. Xero is common internationally. These names are not endorsements. They are tools that let you spot anomalies fast.

Vendor confirmation

Pick your top 10 vendors by spend and confirm payments with them directly. If a vendor claims not to have been paid when your books show a payment you have a problem that needs immediate investigation.

Bank confirms and positive pay

Ask your bank about positive pay. Positive pay is a bank service that compares checks presented for payment against a list of checks you have issued. It prevents forged checks. Also do a bank confirm. This is when you ask the bank to confirm account signatories and outstanding transactions for a specific period. Banks do this for auditors all the time.

Look for round number regular payments

Recurring monthly payments for the same amount are normal for subscriptions. They are not normal for contractors who invoice varying amounts. If you see a recurring amount to a vendor that should be project based that is a red flag.

What to do right now if you suspect your manager stole from you

Take a breath. Then move fast. The law rewards people who act quickly to stop fraud. The following is a chronological emergency plan.

1. Freeze account access. Contact your bank and request the bank to freeze the account pending investigation. If the manager has online access ask the bank to remove that login immediately. Banks will usually comply once you provide documentation such as a police report or lawyer letter. Even if the bank resists you must escalate to a branch manager and a bank fraud specialist.
2. Get copies of all statements. Ask the bank for full statements for the period under review. Electronic downloads in CSV or PDF format are ideal for auditors. Request transaction details not just balances. You need wire details and beneficiary information.
3. Bring in a forensic accountant or CPA. Forensic accountants know where to look and how to follow the money. You will pay for the investigation. If wrongdoing is found their report will be critical evidence for law enforcement and civil recovery.
4. File a police report. File a report with local law enforcement and request a case number. This is necessary to get action from banks and for insurance claims if you have crime coverage.
5. Contact a lawyer who knows entertainment finance. Do not email threatening notes. Let a lawyer handle formal communication. Lawyers can draft demand letters and handle asset freezes and civil recovery.
6. Notify tax and royalty parties. If tax payments were missed inform your CPA and the relevant tax authority. If PRO payments look wrong contact ASCAP, BMI, or SESAC and your publisher to alert them that an account may be compromised.
7. Change passwords. Change passwords for all financial logins. Use a password manager and enable multi factor authentication which is an extra verification step such as a code texted to your phone.
8. Communicate with your team. Tell band members and key staff what is happening in clear language. Keep communication factual. Panic will make things worse. Share the action plan and who is leading the response.

How to choose trustworthy people to manage your money

Trust is earned through process. Anyone who resists common sense protections like audits, dual signatories, or bank notifications is not a person you want handling your money. Here are selection guidelines.

• Check references from artists who pay taxes and who are not in drama. Ask for references and call them.
• Prefer firms over individuals for critical functions. Firms have insurance and processes that reduce personal risk.
• Hire a CPA firm for taxes and payroll rather than a manager doing both unless they have clear credentials and insurance.
• Ask about fidelity insurance. This is an insurance policy that covers theft by employees or contractors. Managers and firms that refuse to have a policy are risky.
• Request criminal and credit background checks if they will be signing for accounts. Many professional firms accept this as standard.

Real life horror stories and the lessons they teach

Story one. The band who trusted their manager. This manager set up an account under a business name and told the band the checks for a festival would be deposited there. The manager controlled payroll and paid themselves hefty monthly draws. The band did not review the bank account. Months later the band learned their tax paperwork was missing and the manager had siphoned off a large portion of gross income through side contracts. Lesson. Insist on view only access and monthly reconciliations.

Story two. The songwriter who signed POA on the road. A weary songwriter signed a POA to let the manager handle quick deposits and payments while on tour. The manager used the POA to guarantee a loan for a separate company and parked some tour income as collateral. When the loan defaulted the bank sent notices to the songwriter. Lesson. Avoid broad POA. Use limited, time bound documents with expiration and termination clauses.

Story three. The indie label payout that vanished. An indie label deposited a sync advance into an account controlled by the artist manager. The manager recorded a payment to the artist but kept the balance and invented expenses. The label took months to audit. By then the money was gone. Lesson. For significant incoming funds consider escrow accounts or require that label to pay a portion directly to artist accounts.

Checklist you can print and hand out to your team

• Two signatories on all business accounts for amounts over a set threshold.
• View only access for artists with daily transaction alerts.
• Separate accounts for operating, payroll, taxes, and savings.
• Written expense policy with approval limits and required receipts.
• Payroll handled by a third party payroll provider.
• Quarterly reconciliations by an independent CPA or bookkeeper.
• Manager agreement with audit rights, POA restrictions, and transition terms.
• Fidelity insurance policy covering theft by employees or contractors.
• Password manager in use and multi factor authentication turned on for every financial login.

FAQ

What if my manager says they need sole control to act fast

Speed is important on tour and in negotiations. You can give limited authority for specific things such as a pre approved travel booking or small vendor payment while keeping controls for larger items. Use a written limited power of attorney that expires in a short time and that is narrowly scoped. For example you can allow a single vendor payment under a set amount. Do not hand broad control for indefinite periods.

Can I change account signatories without legal fallout

Yes. If the account is in your name or your company name you control signatories. Banks will ask for documentation. If the account is jointly owned you will need consent from the other owners. If your manager refuses to cooperate consult a lawyer and your bank. Quick action is critical if you suspect misconduct.

Do I need a lawyer to set this up

Yes. You need a lawyer to draft or review management agreements and POA. Legal guidance is essential for crafting clauses that work in your jurisdiction and that reflect your business structure. Lawyers who specialize in entertainment law will be familiar with common abuses and the protections that work for artists.

What is fidelity insurance and should I get it

Fidelity insurance covers theft or fraud committed by employees or people handling money. It often covers managers, bookkeepers, and other staff. If you have a professional handling funds you should consider fidelity insurance. It is a risk transfer that can pay out if someone inside takes money.

How often should I reconcile my accounts

Monthly is the minimum. If your business has frequent transactions consider weekly reconciliations. Reconciliation is the act of comparing bank statements to your accounting ledger. Doing it regularly prevents small problems from growing big.

What do I do if the bank will not freeze the account

Escalate to the branch manager and request the bank fraud unit. Provide your police report and a lawyer letter. If the bank still resists you can ask your lawyer to file for a court order to freeze funds. That is a more serious step but it is sometimes necessary. Banks are typically cooperative when there is clear evidence of fraud.

Action plan artists should use today

1. Ask your manager to set you up with view only access to your business accounts and to enable transaction alerts immediately.
2. Request copies of bank statements for the last 12 months and begin a reconciliation with your CPA or bookkeeper.
3. Insert the dual signatory clause into your management agreement and limit any POA to specific tasks and short durations.
4. Move payroll to a third party provider. Set up a dedicated tax account and transfer a fixed percentage of gross income each time money is deposited.
5. Purchase fidelity insurance and get a written expense policy that defines approval limits and required receipts.
6. If you suspect theft contact a lawyer, file a police report, and freeze account access through your bank.

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