Employee Theft | Is It Happening To You?

Employee Theft | Is It Happening To You?

  Employee theft is rampant in small to mid-sized businesses. It never ceases to astound people that a trusted employee could steal from their employer. It is happening every day. Large amounts are being stolen from businesses both small and large.   The Truth About Employee Theft   After the Enron debacle, Congress passed “Sarbanes Oxley” to tighten the responsibility of the accountant to detect fraud. Talk to someone in the accounting community about SOX and they will roll their eyes and heave a large sigh. In all levels of the attest function performed by accountants (compilation, review and audit), SOX has had an effect. The result of this increased testing is that more employee theft than ever before is being uncovered. In fact, the AICPA (American Institute of Certified Public Accountants) released a study that gave some astounding statistics. According to their survey of members, up to 82% of small to mid-market businesses have or will experience employee theft. Among the incidences of theft uncovered, the average theft amount equals $125,000!! And believe it or not, most of these thieves are not prosecuted. Are you a victim? Most of us would immediately say “No, all my employees are completely trustworthy.” But, what about the next employee you hire? What about the employee who has had an unexpected life change (divorce, death, or other experience) that has affected his/her financial stability? What about that employee’s spouse who you might not quite trust? Could that person have undue influence to convince your employee to do something untrustworthy?     Examples of Employee Theft   Cash. Does the employee who collects the cash...
5 Reasons Companies Fail | Avoid Making a Business Mistake

5 Reasons Companies Fail | Avoid Making a Business Mistake

  Companies fail for a lot of reasons, but financial mismanagement is generally at the top of the list.  Here are five reasons why firms bite the dust, and how to avoid making a business mistake: Business Mistake #1 Revenue – or Rather, Quality of Revenue.  Many entrepreneurs – if not most – have a sales background, and they do what they do best – sell!  There are many great sales tracking processes, incentive schemes, CRM systems and rosy projections. Less often seen are client gross profitability models, incentive packages that reward profitability and collectability, and concern about concentration of clients.  When it comes time to value your company – make sure you have revenue quality. Business Mistake #2 Failure to Measure Gross Profit.  Many small companies fail to distinguish between overhead costs and cost of sales.  Cost of sales are costs that are needed to make a sale: cost of product, cost of service delivery, payroll for service fulfillment, etc.  Overhead costs are costs that would be incurred whether you made zero sales or more sales than you know what to do with: rent, administrative costs, and office costs to name a few. Failing to distinguish between the two properly means you have no idea how you are doing relative to peers, and have no way to control overhead or maximize profitability. Business Mistake #3 Lack of Costing Data. Many companies fail to develop metrics that can tell them the cost to deliver a product or service per unit. When you pin down your cost of service delivery, you can start to find ways to reduce or transfer...
Accounts Receivable Management

Accounts Receivable Management

 Accounts Receivable Management – Definition Just as a physician would not prescribe a patient’s treatment without first diagnosing the condition, companies should not propose changes in the company’s credit policies and procedures without thoroughly evaluating the present situation.  There should be a thorough evaluation.  Although an organization may intuitively suspect problems exist, the danger is that other troublesome areas are being masked and will be overlooked without a more thorough diagnosis.  In addition, companies should conduct such an evaluation periodically to enforce and evaluate continuous improvement strategies in the management of the accounts receivable function. Accounts Receivable Management “includes establishing a credit and collections policy for your credit accounts, including aging accounts receivables and whether to sell on credit at all” (Bizfinance, http://bizfinance.about.com/od/Accounts-Receivable/) Change is a constant companion in today’s business world.  However, change does not have to become a major issue or project if handled properly.  The first step in handling change is to determine where the company, and more specifically its accounts receivable function, is currently headed.  Once a company has determined the status of the receivables system, they can plan for changes and manage those changes.  This is a far better approach than making changes without prior planning, which can create continual turmoil and widespread resistance to new changes.  Companies should also be wary of failing into accepting the present without seeking improvements.  This may require periodically looking at the entire process.  Such a major undertaking involves careful planning as to both the goals and the procedures to be followed.  Goal setting for both the final and interim positions with specified continuous improvement steps is important....
Using Excel for ERP Reporting

Using Excel for ERP Reporting

ERP Reporting – Background ERP systems are very powerful software systems and I find they are often badly implemented in smaller companies. This often happens because the vendor or the customer underestimated the implementation cost, or because the customer has few sophisticated users, or time and money simply run out. Sometimes this results in a broken system, or just an expensive GL system or no system at all. Being a B2B CFO® partner, with my extensive background in financial management and systems, I am often called upon to try and help make sense of the situation. Reporting is often a clear area of frustration for the smaller company. Often they have been used to the flexibility of report design in QuickBooks – which I believe is world class – and have no internal skills to deal with products like Crystal Reports, or proprietary ERP reporting tools. My approach is generally quite simple. Everyone knows Excel. If we can get the data to Excel then everyone is on the same page, and we start using information to build corporate value. I recently developed several very interesting reports for a Distributor using Excel and simple database techniques to find and grab my data directly from the underlying ERP tables. This technique allows me to quickly build some very useful management reports. While the initial set up is a little tricky, maintenance and updates can often be done by the client. The resulting reports focus on understanding monthly performance and identifying weakness in the major customer/ vendor relationships. ERP Reporting – 1st Indicator: F9 for Financial Reporting 1. F9 for Financial Reporting...
How To Use Quickbooks – Adding Classes

How To Use Quickbooks – Adding Classes

Something that our clients commonly ask, “How to use Quickbooks?” “Specifically adding classes?” If you ever asked this question, continue reading to learn how to use QuickBooks like a pro. QuickBooks provides a feature called Classes that permits you to group items and transactions in a way that matches the kind of reporting you want to perform. Think of this feature as a way to “classify” business activities. To use classes, you must enable the feature, which is listed in the Accounting section of the Preferences window. How To Use Quickbooks – Why Should I Configure Classes Some of the reasons to configure classes include: Reporting by location if you have more than one office. Reporting by division or department. Reporting by business type (perhaps you have both retail and wholesale businesses under your company umbrella). You should use classes for a single purpose; otherwise, the feature won’t work properly. For example, you can use classes to separate your business into locations or departments, but don’t try to do both. When you enable classes, QuickBooks adds a Class field to your transaction windows. After you create your classes, you can assign one of them to that field. How To Use Quickbooks – Adding a Class To create a class, choose Lists | Class List from the QuickBooks menu bar to display the Class List window. (Remember that you must enable Classes in Preferences to have access to the Class Lists menu item.) Press Ctrl-N to add a new class. Fill in the name of the class in the New Class window. Click Next to add another class, or click...