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...
What Is Meant By Business Potential

What Is Meant By Business Potential

What Is Business Potential? I was sitting in a seminar this morning and the presenter mentioned, “reaching for the full potential of the business.” I quickly thought to myself, What is the definition of full business potential? A quick search on Google proceeded to muddy the waters even more. Some of the search results listed on the first two pages were: Are You Marketing to Your Business Potential? Tapping Business Potential in Africa Tapping Business Potential in India Increase your Business Potential with a Web Site The Next Billions: Unleashing Business Potential in Untapped Markets Maximize Your Business Potential through your Employees! Aging in Place: A Business Potential American Express: Unlock Your Business Potential It appears everyone talks and talks and talks about business potential, but apparently it means something different depending on the message you are trying to convey. Is business potential measured in growth? Gross revenue or Net Revenue? Number of employees? Gross margin percentage? Or is it something more intangible like the satisfaction of the business owner? Happiness of the employees? Service to the community? Or maybe it is the reward of providing a valuable service/product to clients and customers? Business Potential – The Theory I believe business potential is all of these. All business owners need to figure out for themselves what business potential is for their business. They need to set goals based on this potential and start moving in that direction. But why is it so few actually reach their goal? Why is it that with all the available books and websites telling us how we can achieve more, that most people give...