Tag: SE+

fraud

Protecting your business against fraud

“The intentional deception for personal gain” makes it all sound a bit obvious, but how do you know there aren’t fraudulent activities taking place within your business? There are many types of fraud and unfortunately, some are very hard to detect until it is too late, but there are procedures you can put in place to mitigate that risk. This blog post will look into the most common types of fraud and offer recommendations to improve your accounting function in order to protect your business from being a victim.

 

Cash misappropriation:

 

Many small businesses are either cash based, or a significant portion of their trade is conducted in cash and this presents the most common type of fraud: cash going missing. Although this is in fact tax deductible, it is not something many business owners look kindly upon! An individual who gets away with stealing from petty cash once may try again, and small amounts are very hard to trace. If there are differences every month, try altering the system by adding in an extra control – put someone else in charge or introduce an authorisation policy.

 

False accounting (purchase ledger):

 

Fictitious purchase invoices to connected parties is a common type – a purchase ledger clerk or someone in an equivalent position may raise invoices – often for immaterial amounts in relation to the trade – to an acquaintance’s company. A procedure to put in place that would reduce this risk could be to require at least three quotes for new types of purchases that are not bought from existing suppliers. Another possibility would be to utilise a purchase order matching facility within your accounts software – many of the packages offer this as an add-on. This automatically matches purchase invoices and the subsequent payments to initial purchase orders made. Reports can be run off to show invoices raised that did not have a corresponding order which would highlight any possibilities of fraud.

 

False accounting (sales ledger):

 

For sales companies that offer incentives for meeting targets, there is a risk that employees may exaggerate the number of sales they make in order to increase their bonus. Adding in a control step where a more senior member of staff has to authorise the generation of sales invoices could help to reduce this risk. Another solution would be to review the dates of transactions: high activity near period ends could suggest something isn’t quite right when coupled with sales credits being raised soon after the period end.

 

Stock misappropriation:

 

Businesses with expensive raw materials and finished goods are always a target of opportunist employees. Small amounts are very hard to trace, so an employee could feasibly get away with stealing inventory to resell personally for a long period of time. Monitoring yield percentages in your manufacturing process would be a good way of identifying theft of raw materials. Monitoring levels of stock wastage and setting targets (with incentives) for reduced wastage would insert a “peer police force”, whereby colleagues would look out for theft from the company as it would directly affect their incentive. This would be a subconscious effect on employee behaviour – you would be seen to be offering an incentive for more efficient production whilst protecting the business from fraud simultaneously.

 

Expense claim falsification:

 

Sometimes employees may try to claim more on expenses than they actually spent, exaggerate the mileage they have done in the month or entertain family and friends at the company’s expense. More than likely there will already be a control in place whereby a manager or suchlike approves junior members of staff’s claims. A way around this would be to require invoices for each expense and use standard mileage distances for regular journeys. Also, (publicised) random checks would persuade staff to act honestly.

 

Online fraud:

 

There are many types of online fraud that are targeting small businesses and are becoming increasingly harder to detect. Account takeover, phishing and identity theft are all realistic threats to the business world, and when you are having a busy day it is easy to be tricked into clicking a link in an email. A current example of this is an email from a fraudster pretending to be ‘HMRC’ informing you that you are due a tax refund, with a link to follow to provide your bank details so that they can transfer the money to you. Under no circumstances would HMRC contact you via email, or indeed by telephone, to do this – and by providing your bank details you will find that the ‘refund’ is actually a way of fraudsters obtaining your details to take money from your account.

 

Aside from being extra cautious and regularly reminding your staff of the risks involved there are limited options available – as your staff are the ‘last line of defence’. It is important that they understand the importance of staying vigilant when operating online – common sense is key – questions you should be asking yourself is what does this person actually want and is it normal for them to be asking for it?

 

All of the above recommendations regarding employees would be made easier through instilling a strong set of values in the hiring process – an effective recruitment technique goes a long way when looking to hire a good, honest workforce.

 

Try QuickBooks for free!

QuickBooks can help assist you with running your small business. To sign up for your free 30-day trial, click here!

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improve organisation

Top tips to improve organisation skills and improve cashflow

My new year’s resolution is to: Improve my organisation skills and improve cashflow

 

How much time do you lose sorting through all of your credit card charges and paper receipts to work out how many of your purchases were business expenses? Perhaps 2018 is time to step up your organisational efforts and implement a system for tracking your business expenses in real time. Look at our top tips:

 

Create a business bank account

 

If you’re a sole trader with a new business, you may not have made it a priority to separate your business and personal transactions. If that’s the case, don’t delay it anymore! Put all of your business income directly into a business account, and use a business credit or checking account for any business-related purchases that can be paid by card. You can move money from one account to the other as necessary, but drawing a clear line between the two accounts will help you easily keep track of whether you’re making business or personal purchases. Creating a business bank account will also build up your business credit, which will come in handy if you might need financing in the future.

 

Stay on top of your receipts

 

Without a doubt, one of your business priorities should be staying on top of your expenses as without a firm grip on just how much you’re spending, what looks like a healthy profit, could in fact be worrying losses. QuickBooks makes it easy for you to keep your expenses under control using the mobile app. All you need to do is take a photo of your receipt and attach it to your transaction within your QuickBooks account – simple.

 

Evaluate your payment terms

 

Cash flow can be difficult to manage, particularly if your customer and supplier terms aren’t well balanced. It’s important to look at whether the terms you’re offering customers work well for your business and have a clear indication as to whether your customers are receptive of your terms.

 

Suppliers must also be considered. Are your terms similar to others within the marketplace? Could you be missing out on a discount if you were to pay earlier?

 

Whilst that may not be in line with reducing the receivables-payables gap, the discount may make it worthwhile!

 

Try QuickBooks for free!

QuickBooks can help assist you with running your small business. To sign up for your free 30-day trial, click here!

 

QuickBooks

Common QuickBooks errors and how to resolve them

Bank account does not balance

 

All bank transactions are entered manually/via bank download however the bank balance per QuickBooks does not agree to the balance per the bank statement. This could be due to a number of reasons such as timing, duplications, etc…

 

To correct: Click on company cog, then click reconcile and then enter the details per the bank statement. Go through and tick each transaction that has cleared the bank until the account balances and the difference on the top of the screen reads zero. Review any unreconciled transactions to check why they are still outstanding and ensure they are not duplications.

 

You’re not reconciling other balance sheet accounts

 

The reconciliation process can be used for various other balance sheet items such as credit cards, bank loans, inter-company balances, petty cash etc…

 

Deleting transactions

 

If you have entered a transaction incorrectly please consider any linked accounts before deleting the transaction.

 

Outstanding bills

 

A bill is showing on your aged payables report that you know has been paid. It is likely that this payment has been recorded as an additional expense therefore duplicating the invoice or allocated against an incorrect bill.

 

To correct: Search for the payment amount in the search bar and select the payment. Change the supplier on the payment and allocate to the correct bill then save.

 

Duplicated customers/suppliers

 

You notice that a debtor has been set up twice in the customer list, or creditor in the supplier list.

 

To correct: Change the duplicated customer/supplier names to exactly the same, this will prompt QuickBooks to ask you to merge the accounts together.

 

Not using the reports available

 

Various reports such as profit & loss, balance sheet, aged receivables & aged payables are available at the click of a button. These reports can help to identify any mistakes and give a valuable insight into how the business is performing on a day to day basis.

 

Never ending recurring transactions

 

When setting up a recurring transaction no end date was input and transactions are still being input when the contract has ended.

 

To correct: Click company cog, then click recurring transactions select the recurring transaction and on the drop down menu delete. Then once the bank account has been reconciled (see step 1) remove any transactions that were after the contract had ended.

 

Getting the most out of QuickBooks can be beneficial to your business as a whole; Moore & Smalley offer various levels of support and training. We would be happy to discuss these with you at any given time.

 

If you would like to discuss QuickBooks in more detail, or you would like to speak with a member of our team, please contact Danielle Taylor or call 01253 404404 to be put in contact with a member of our Small Business team.

work-life balance

Work-life balance ‘headache’ for entrepreneurs

Juggling family life while growing a business tops poll of challenges

 

Cashflow and payroll also major concerns, finds Chiks research

 

Business owners urged to ‘invest in the right support’

 

The pressure of balancing family life with running a business is the biggest headache faced by aspiring entrepreneurs, according to a poll by a Preston accountancy firm.

 

Half of small business owners (50%) in a survey by Chiks admitted worrying about the amount of time they spend working at home outside normal business hours.

 

Almost one in three (29%) said managing cashflow was their greatest concern, with just over one in ten (13%) saying that keeping on top of invoicing was their main challenge.

 

Managing the company payroll and ensuring employees get paid on time is another issue that keeps company bosses up at night, with 8% saying this was their greatest business fear.

 

Judith Dugdale, a director at Chiks, said: “Running your own business is not for the faint-hearted. It takes bags of resilience and many tough choices need to be made along the way.

 

“The results of our latest poll show the need for business owners and those who are self-employed to seek help in achieving a better work-life balance. Getting good advice and investing in the right support functions as the business grows can make a huge difference.”

 

Chiks launched a cloud accounting service in 2015 to help small business owners and the self-employed to manage their accounts, invoicing and payments on the go.

 

The service, known as , is powered by Intuit Quickbooks software with additional support provided by Chiks’s team of business, accounting and payroll specialists.

 

Judith added: “SE+ streamlines the administrative burden and enables small business owners to focus on what they do best – growing the business.”