Tuesday, January 13, 2015

Business Owners Can Get Ahead by Learning

Business owners will have a lot to learn especially after they start their own business. The learning takes place right from the start. You are probably an expert in how to do your business, but there will be things that you will not know about running a business. The SBDC advisers can give you guidance of the professionals you will need to meet with and the items that you will need more information.

When meeting with the professionals, like attorneys or accountants, do your homework ahead. While you school may have taught you to do homework after the lesson, the successful students learned to do their homework ahead of the lesson. So if you are meeting with accountant, learn what an accountant is and what he she should be the expert in. That might also researching the background of the accountant you are meeting. In addition, learn some terms that accountants use. Another important tip is that you should write down 3-5 questions to ask. Professionals appreciate that you cam prepared and are referencing back to notes or questions you brought along.

However once you begin operating a business, the learning continues. A successful business will need to maintain an understanding of industry trends as well as technology trends. You do not have to immediately jump on each new trend, but having some knowledge will be important when evaluating the future plans of your business expenditures and investments.

Monday, December 8, 2014

6 Tips for Preventing Employee Theft and Fraud in the Workplace

By Caron_Beesley, Contributor
Published: December 23, 2010 Updated: March 27, 2013
Whether it's downloading and sharing company confidential information (a hot topic these days), manipulating expense reports, or stealing merchandise- employee theft and fraud is a serious issue for business owners. In fact, studies show that occupational fraud now results in the loss of five percent of an organizatio-s annual revenue.
Here are some tips for preventing and managing employee theft or occupational fraud.
1. Use Pre-Employment Background Checks Wisely
One of the first steps to preventing fraudulent employee behavior is to make the right hiring decision. Basic pre-employment background checks are a good business practice for any employer, especially for those employees who will be handling cash, high-value merchandise, or have access to sensitive customer or financial data.
This Guide to Pre-Employment Background Checks outlines the types of information that you can consult as part of a pre-employment check, and the laws that govern their use. I's worth noting, that the law varies from state to state on whether a private employer can consider an applican's criminal history in making hiring decisions. Check with your local EEOC office for the laws in your area before going down this path.
2. Check Candidate References
I'm always surprising how very few employers reach out to check candidate references' often assuming that a reference will never be anything but glowing. However, i's good practice to check references' particularly those of former employers or supervisors. If your candidate has a history of fraudulent behavior' then yo'll want to know about it, before you hand them a job offer.
3. Proactively Communicate Conduct Guidelines
Every business needs an employee code of ethics and conduct - while it won't prevent criminal or fraudulent behavior, the standards it outlines will set a clear benchmark for employee behavior and guidelines on how to do business based on a series of principles that promote ethical and lawful conduct.
Once developed, the code of conduct should be documented and agreed to by all new employees (and existing employees if you haven't put a code in place yet). You can find many templates for basic codes of conduct on the Internet, but as a rule of thumb you should include policies that cover the protection of company data, the avoidance of conflict of interests, and of course, obeying the law.
Use employee orientation as an opportunity to go over the code of conduct and explain any areas that are unclear.
Then, revisit the code each year and be sure to add any new considerations that may have materialized - for example, if you do business with certain suppliers, contractors, or government agencies who require you and your employers to agree to new codes of conduct as part of your business relationship.
4. Don't be Afraid to Audit
Auditing always has a big brother feel, and in a small business environment this is especially true. However, conducting regular audits can help you detect theft and fraud. Audits can also be a significant deterrent to fraud or criminal activity because many perpetrators of workplace fraud seize opportunity where weak internal controls exist.
As a rule of thumb, identify high risk areas for your business and audit for violations on a 6-12 month basis - these could include business expense reports, cash and sales reconciliation, vacation and sick day reports, violations of email/social media or Web-use policies, and so on.
The Association of Certified Fraud Examiners (ACFE) can help companies detect and deal with fraud in the workplace. Find an ACFE-certified fraud examiner near you*.
5. Recognize the Signs
Studies show that perpetrators of workplace crime or fraud do so because they are either under pressure, feel under-appreciated, or perceive that management behavior is unethical or unfair, and rationalize their behavior based on the fact that they feel they are owed something or deserve it.
With this in mind, some of the potential red flags to look out for include:
  • Not taking vacations - many violations are discovered while the perpetrator is on vacation
  • Being overly-protective or exclusive about their workspace
  • Prefers to be unsupervised by working after hours or taking work home
  • Financial records sometimes disappearing
  • Unexplained debt
  • Unexpected change in behavior
6. Set the Right Management Tone
One of the best techniques for preventing and combating employee theft or fraud is to create and communicate a business climate that shows that you take it seriously . Here are some simple steps you can take to keep your finger on the pulse:
  • Reconcile statements on regular basis for fraudulent activity
  • Hold regular one-on-one review meetings with employees
  • Offer to assist employees who are experiencing stress or difficult times
  • Encourage open-door policies giving employees the opportunity to speak freely and share their concerns about potential violations
  • Create strong internal controls
  • Require employees to take vacations
  • Treat unusual transactions with suspicion
  • Trust your instincts
How have you encountered workplace theft or fraud? How did you deal with it or what preventative measures do you use? Leave a comment below.

About the Author:

Caron Beesley
Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Tuesday, October 28, 2014

4 Excuses Why People Fall Short of Starting a Business

1. I do not know anything about Starting a Business

Starting a business has many components to understand, which all can be taught through either experience or reading blogs, articles, or books. Also attending workshops about various topic are so readily available today with the internet. Also, meeting with other small business owners or consultants can help you gain the knowledge to get your business started.

 2. Afraid of Failure

Its so natural for people to be afraid of failing, especially in small towns, where everyone knows everyone. Failure can happen whether you own a business or are an employee. While running your own business is big risk adventure, it can also have big opportunities with hard work and continuous innovation skills.

3. Right now is not the right time

Every stage of life we can say something about it not being the right time. You have to ultimately make the decision and just work at it. Timing should not be an excuse. We can't control what will happen tomorrow or beyond, but properly preparing and planning will help in identifying the start date of your business. Begin looking at what you have and know and identify what you still need to know or acquire to start your business. Then start planning and setting dates when it should be completed.

4. I need a paycheck weekly.

We all have bills to pay and we need the money to pay for goods to keep us in good financial standings. You can begin with identifying what it will cost you to go 6-12 months worth of expenses. Set aside those funds in a special checking or savings account. Do not touch the money, as you may need it to fill the gap when business times are tough. Also, you can always start your business and maintain other employment. People can begin a business part time and work full time. You can also go into your business fulltime and work a part time job to have a steady paycheck. You will have to do your own financial review and see what you need to live comfortably. 

Wednesday, July 30, 2014

Bookkeeping Basics: The Four Hallmarks

Author:  Resa Remus-Stariha, Bookkeeper

                Bookkeeping is the recording of a business’ everyday transactions.  Bookkeeping records the facts about a business for both internal and external use and are used to report the financial position of a company, track assets and liabilities, show income and expenses, and prepare taxes.  The four hallmarks of bookkeeping are:
1.       Relevance: Relevant information provides accurate feedback. It evaluates what is happening in the business which is crucial in decision-making.
2.       Reliability: Reliability represents the truthfulness and dependability of the information.  It means that this information can be verified. Remember: garbage in – garbage out.
3.       Consistency:  Sales, expenses and various other transactions should be entered into a bookkeeping system on a routine basis.  Consistency in entering data provides an accurate picture of where the business has been and where it is going.  A business owner will be able to quickly identify if expenditures are exceeding income and create a business plan toward profitability. 
4.       Comparability:  Comparability gives the company the ability to compare operations over years or over product lines.  It gives the user quality information to compare different companies, markets or time periods using the same standard.

A simple spreadsheet can be used for very basic records, however there are a myriad of programs that are available and not difficult to learn -QuickBooks and Peachtree are two of the preferred software packages utilized by small to medium size businesses to get more defined information.  Whichever method is chosen these ten basics need to be tracked:

1.  Cash
2.  Accounts Receivable
3.  Inventory
4.  Accounts Payable
5.  Loans Payable
6.  Sales
7.  Purchases
8.  Payroll Expenses
9.  Owners’ Equity
10. Retained Earnings

Applying the four hallmarks of bookkeeping to the ten items to be tracked is the key to accurate bookkeeping.  It should be noted that these hallmarks are interrelated, an example is: putting information into the system is both relevant and consistent.

1.       Relevant: Any information pertaining to the business should be entered into the chosen system and all documents filed on a timely basis. For the small business, set time aside weekly for this task. Have important files close at hand, older files can be stored elsewhere if space is at a premium.  Paperwork can accumulate quickly and become unmanageable or lost if not managed on a regular basis. How long to keep documents varies, it is important to maintain files for that prescribed time.  Check with your accountant for more details.
2.       Reliability:  Source documents should always be used for the correct amount of each transaction and filed. Keep all receipts and other source information.
3.       Consistency:  Be consistent in how you treat similar expenses and similar income.  One example is sales tax: Goods are most often taxable with some exemptions while services are generally exempt with a few exceptions. Having a policy handbook will eliminate any questions especially if more than one person is involved with maintaining the books.  Accounts should be reconciled on a monthly basis. 
4.       Comparability:  Evaluate the business on a routine basis through the financial statements:
a.       Income Statement: Evaluate revenues, expenses, gains, and losses.
b.      Balance Sheet: Evaluate assets, liabilities, and equity.
c.       Statement of Cash Flow: Evaluate cash sources and uses.

Bookkeeping is a basic necessity of every business.  Maintaining company books makes analyzing the business more accurate and tax preparation easier.  It is a vital practice to help understand your business.