Creating a Money-Making Business Plan

In my experience (at least with the small businesses I’ve worked with), a business plan is often considered an “unimportant” waste of time, and many small business owners forego creating one.  The truth, however, is that a Business Plan can be incredibly beneficial for a business.  Not only can a business plan create a “Guide” for a company and its employees, but a good plan can also be taken to the bank in order to try and raise funding for a small business.  It can attract investors as well, and it can help focus a business owner’s vision in order to make the business as profitable as possible.

While there are tons of business plan models on the internet today, I can’t help but want to throw my own cap into the ring as well.  There are the business plans that a lot of general businesses use to satisfy mentors (or spouses), and then there are the types of business plans I’ve worked on, the type that big businesses pay tens of thousands of dollars (and hundreds of thousands) of dollars before they ever so much as sign a rental-lease agreement.

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The difference between a “General” Business Plan and a Business Plan that Makes Money comes down to one very important thing…Research.

When a small business owner includes research into a business plan, they are showing banks and investors that they are not going into a business venture blind.  A well-researched business plan shows forethought, logic, and realistic thinking.

Therefore, to create a business plan that will help raise money, a business should include the following elements in their business plan:

  1. The Mission Statement: In Bookkeeping Money-Saving Tip # 15: The Mission Statement, I discussed the importance of having a Mission Statement.  It is just as important to put that Mission Statement into the Business Plan.  Consider it the “Sales Pitch” of the Business that basically tells an investor the Business’s main goal.
  2. An Introduction:  The introduction is a fairly simple concept.  You create a page or two (or three) about the basic business concept.  What is the business selling?  If there is a location, where will that location be?  Will the business have an inventory  and if yes, where will that inventory be kept?
  3. Demographics:  Demographics are an excellent option to add to a business plan because it exhibits that you know who your ideal, targeted customers are and who they can be.  The demographics can help a business see where they should be focusing their marketing dollars, and how to theme their business to attract those ideal clients instead of creating a business that tries to “attract everyone.”  (Read Paint a Target on Your Customers for more information on how to do your own demographic analysis.)                                                             teamwork 2
  4. Competition Analysis:  You know the expression, “Keep your friends close, but your enemies closer”?  This expression is just as true in business as it is in life.  You should know what your enemies (ie, your competition) are doing in their businesses, because every choice they make could potentially harm or help your own business.  Therefore, creating a section that lists ALL of your local competition, as well as what products they are selling (that you may or may not sell as well) and what prices those products are marked at.  The more you know your competition, the more you will be able to create a business model that grinds theirs into the dust (should that be your wish).  Either way, it shows investors that you have a strategy to stay afloat despite what your competition is doing.
  5. CompassLocation Analysis:  A large majority of businesses draw their customers from within 10 miles of their location…TEN MILES. However, the more unique that business and its products are, the farther distance a customer is willing to travel in order to buy what that business is selling.  On the flip side, the less unique a business and its products are, the smaller the distance a customer is willing to travel to make a purchase.  For example – Disneyland has a very unique product; people are willing to fly from all over the world to experience the unique product that Disneyland offers (and that no one has been able to yet duplicate).  Another example – Souvenir shops.  Souvenir shops all sell the same products, and they all try to rent space where the tourists are.  The end result, tourists have so much choice on what souvenirs to buy and where to buy them, they don’t need to go far from their hotels to get what they want.  (In fact, they often buy from within the hotel).  So, in order to create a competent location analysis, you need to include the demographics and competition within YOUR 10-mile radius.  (You can read more about Location Analysis in my article entitled:  BOOKKEEPING MONEY-SAVING TIP #4: Analyze Your Business Location.)
  6. Marketing Plan: At this point, you should know your competition AND your customers, so you should have a pretty good idea how you can target your marketing campaign directly to your ideal customers.  Let your investors know as well.  Include a section just about marketing.
  7. The Dollars and Cents:  No investor is ever going to invest in a business that looks as if it is going to fold its doors as soon as it opens (unless that business is a non-profit).  Investors want to know that a business is going to make money and that they will recoup their initial deposit.  Therefore, the dollars and cents is one of the most important things to include in the Business Plan.  If the business is already open, then bankers would ask for a “Profit and Loss” Statement, as well as a “Balance Sheet.”  But whether the business is in operation or not, another excellent idea to include is the “Pro Formas” or basic monetary projections.  You can create a Budget and include it Graph line: up and down 1in the dollars and cents section, and you can project from that budget how you plan to make more money (or save money).  Calculate Budgets with Low Income-Expense Projections, Mid Range Income-Expense Projections, and High Income-Expense Projections.  That way, the investors will know that the business will still say afloat even in “Hard Economic Times.”
  8. An Executive Summary: The Executive Summary is basically the bare minimum summary of what the business has created plans to accomplish.  It takes the main points from each section, and presents them in a direct manner.  The Executive Summary is basically your “In Conclusion” statement, however, this summary is going to go at the BEGINNING of your Business Plan.  Most investors never really read past the Executive Summary (unless there is something in the Executive Summary that doesn’t make sense), so in essence, the Executive Summary can be the main section that makes or breaks your business plan’s goal:  to raise capital.   Therefore, make sure your Executive Summary has ALL the main items you want an investor to know, and put it right after your Business Plan’s Introduction.  Consider the rest a guide for the business and backup for the more thorough investors.

While I cannot guarantee that this business plan format will raise capital (after all, there are many other factors that investors take into account besides the business plan), I will say that a well written business plan can tip funding in a business owner’s favor.  You really have nothing to lose by creating a thorough, well-researched business plan – but you do have everything to gain.

The SpongeBob SquarePants School of Business

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Okay, I have a confession to make:  I am a Mom.  Even worse, I am a Mom with a Toddler.  What that means is that as a “Mom with a Toddler,” I know all the words to “Elmo’s World.”  I also know how to “Do the Pigeon” and that “C is for Cookie” (which is good enough for me).  I know how to read Dora’s map, and I know Hannah Montana’s true identity.

What’s more… I know “who lives in a Pineapple under the sea.”

Why do I know these things, you may wonder?

Well, as any Moms with Toddlers will tell you, having a toddler means having some cartoon playing over and over and over again on the TV.  For a mom, that means no matter how much you try ignore your children or their shows, bits of information tend to sneak into your subconscious until suddenly you’ve realized that you’ve been singing “Absorbent and Yellow and Porous is he…” for the past hour without realizing it.

Which brings me to today’s blog lesson direct from The SpongeBob SquarePants School of Business…

What the Heck Am I Talking About…(Right?)

(Okay, there’s really no such thing as The SpongeBob SquarePants School of Business, but there may as well be.  After all, children all over the world are watching this show and learning from this energetically peppy cartoon.)

Recently, my toddler was watching all 99 episodes of SpongeBob for about the 50th time (give or take a dozen), and I mind-numbingly found myself watching one of the many, many episodes.  Actually, to be precise, I found myself watching Episode 88 (Episode 9 from Season 5) entitled “The Krusty Sponge.”  And as I watched this particular episode, I realized that it was quite brilliant in the very simple business advice it was offering.

The Premise

imageTo give a quick background on “The Krusty Sponge” episode, the mini-story starts when “The Krusty Krab” receives a visit from a food critic.  (The Krusty Krab is the restaurant SpongeBob works at as a “Fry Cook”).  The food critic in the story proceeded to trash everything about “The Krusty Krab” saying it was absolutely terrible…except for the food and the fry cook (SpongeBob).  The food critic then went on to say that if the owner of “The Krusty Krab” was smart, he would “sponge up” as much of what his cook had to offer as possible.

Thus, as cartoon’s tend to do, the business owner (ie, Mr. Krabs) took the advice to heart and went “way too far.”   Mr. Krabs pulled down “The Krusty Krab” sign and replaced it with a sign saying “The Krusty Krab.”  He then added in two new flavors of SpongeBob-themed condiments, a SpongeBob Mascot, a SpongeBob Train, SpongeBob napkins and even SpongeBob hamburger patties.

Eventually, all of these items backfired in a big way, and Mr. Krabs ended up getting arrested and brought before a judge for “poisoning his customers with the bad hamburger patties.”

The Lesson

Now, while I am a big advocate of using a theme in any business, of seeing the bigger picture and adding appropriate merchandise in order to increase profits, I could see right away where this business was about to get into trouble (even if it is only a cartoon business).  The big mistake that the business owner made in this situation was “taking his eyes off the prize.”  It is a common business mistake a lot of business owner’s make without realizing they are doing it.

Here’s what I mean:

imageIn the story, Mr. Krabs got so excited about his new SpongeBob theme, he made one really huge mistake.  He took SpongeBob off the grill and put him on the train.  (In other words, SpongeBob – the prized Fry Cook – was taken out of the kitchen in order to give “the kiddies” a ride on the new SpongeBob train…Mistake # 1.)  Then, Mr. Krabs gave SpongeBob’s kitchen duties to an employee who was unable to run the grill in the same way that SpongeBob could (Mistake # 2).  Finally Mistake # 3, Mr. Krabs sacrificed the quality of the one product that was praiseworthy – the product that brought the customers in.

imageObviously, I am bringing this up for a reason.  This is a common mistake a lot of business owners make in any business industry.  They see some exciting new trend coming along, and they re-vamp their business model to include the cool new product.  They forget about the one (or two or three) products that brought in the customers in the first place, and they end up weakening the overall business structure.  They take the advertising for their prized product and replace it with advertising for the new product.  This can have a negative effect in driving customers away instead of bringing them in – especially if the people looking for the Prized Product are not aware that the business still offers that Prized Product.

Examples

Just to really drive my point home, I will throw out some examples.

  • Imagine if McDonalds changed their fries to a new fry with the skin on.  Or, imagine if they used a different oil that changed the flavor of the fries.  Since McDonalds gives fries with every “Meal Deal,” and the fries are a part of their brand, it could go a long way in hurting their business.  People may start to go over to Burger King instead in order to get fries they are more used to.
  • Jim Carey switching from his classic comic bend to do a movie like “The Majestic.”  (In Hollywood, a move like that can kill an A-list actor’s career… luckily, Carey returned to his usual brand of comedy.)
  • Leonardo DiCaprio stepping back from the Romantic Hero role to pursue the Golden Globe and Oscar awards (meaning he went for the more dramatic and difficult to play roles).  While Leo remains an A-list actor, he no longer has the International Heart Throb status that he had after “Titanic.”
  • Eddie Murphy going from making R-rated movies to G-Rated movies.  It has completely changed the demographic of his customer base (ie, his fans).
  • Roller Derby in the 60’s went from racing and blocking to more violent hits.  Is it really a surprise that the sport died out by the 70’s?  I can honestly say, Roller Derby today is nothing like the original Roller Derby invented back in the 30’s.

Unfortunately, these are the only examples I can think of at the moment, but hopefully, it helps make my point clear.  Taking your eyes off the Prize of your business can really harm your business, or even drive away your clientele.  Learn from Mr. Krabs:  If you’re going to make a change in your business, keep your eyes on the prize.

Diary of a Bad, Bad Bookkeeper (Day 195) – The IRS

Betty Bookkeeper Headshot

Dear Diary,

Today I got a notice from the IRS.  Luckily, the receptionist passed the letter to me unopened before the boss saw it (she didn’t know what it was), and he doesn’t know it’s here.

Opening the letter, I was shocked.  The IRS said that the company owned payroll taxes on the paychecks for the last three months that I’ve been here, and since we hadn’t paid when we were supposed to, we now owe penalties and interest.  Apparently, payroll taxes are due within three business days of cutting payroll checks, and the IRS considers that money “they’re money.”  All I can say is…”WHOOPS!”

So now I have a dilemma.  Do I show the boss the letter and have him cut the check right away?  Or, do I just hide this letter and try to deal with it a little at a time, without the boss knowing?  Obviously, the first choice comes with the unfortunate consequence of the boss coming to believe that I don’t know how to do my job when I do (I mean – Seriously!  It was one simple mistake).  The latter choice means that he continues thinking I’m brilliant, and that the company is doing better in my hands…

Hmmmm…choices, choices.

Although, now that I think about it, I see a third option here.  I could always continue to fill out the payroll tax forms, but instead of cutting the IRS checks, I could just take the payroll tax money and enter the taxes as “Paid” in the bookkeeping program.  The boss will think that I’m paying the taxes, and I can make a little extra on the side.  Then, if the IRS does ever come calling, I can just explain it away as, “the bookkeeping program must have made an error in calculating the payroll taxes.”  After all, it’s not like the boss would expect me to stay on top of all the interest rates.

And how often does the IRS come calling?  I mean, Really?

You know what they say, “Ignorance is bliss.”

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Keeping a Clean Bill of Health with the IRS

I’ve often told my clients, “The IRS is an unforgiving mistress.”  Would this piss the IRS off to hear?  Sure…but I think they would rather keep their intimidating reputation than have people painting them as sweet and kind.

The facts are these…The IRS considers themselves debt collectors for the people.  The money that a business is supposed to pay does NOT belong to the business, but to the business’s employees the moment those checks are cut (at least in the IRS’s point of view).  What that means is, they will NOT negotiate on when you can and cannot pay payroll taxes.  You should pay it within three business days of the checks being cut, PERIOD.  And if you ask employees to hold off on cashing their checks until you can get some money in the bank account, you could suffer fines as high as $25,000 per Employee Check.  (Imagine it…your business is strapped for cash, and so you ask your employees to wait a week to cash their checks.  Then you fire a bad employee.  What will they do?  They’ll run to the IRS and report you, and BAM – bye, bye business.)

The point I’m dancing around here is that – YOU DON’T MESS WITH THE IRS!  You – whether you’re the bookkeeper or the business owner – need to make sure the taxes get paid on time.  Since payments can now be made over the phone directly from a checking account, the business owner will likely never see a payroll tax check to cut.  That means, the business owner needs to check up on their bookkeeper and make sure the taxes were paid, or you could suffer huge fines.

To Make Sure the IRS Taxes are Being Paid

This step merely comes down to one thing yet again. Open your bank statements and look at it.  You will probably see the payments listed near the top, detailed out as an EFTPS payment to the IRS.  It’s that simple.  If you don’t see the payments cut as often as payroll is cut, get it taken care of immediately.

One Last Note for Small Business Owners

The mistake of not paying the payroll taxes is VERY common with a lot of bookkeepers.  The biggest reason is that many bookkeepers are office managers that were handed a company’s check register and told to “take care of it.”  So, just because payroll taxes may not have been paid at your company, doesn’t mean your bookkeeper is an embezzler.  It could just mean that they aren’t on top of everything they’re supposed to be doing yet.  Make sure your bookkeeper is on top of the IRS forms, and definitely talk to your accountant for help.  That’s an accountants main job – to deal with the IRS.

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The 10 Customer Service Rules that All “Big Businesses” Utilize

You may be wondering, “E.T. Barton is a bookkeeper and a researcher.  What the heck could she possibly know about customer service?  What qualifies her to teach a lesson like this one?  She’s ‘Back Office’ – NOT Retail.” 

Picture by thadz

SignTo be quite honest…I rock at customer service.  I mean, I seriously kick butt.  But that is not actually what qualifies me as a customer service expert.  What qualifies me is the fact that one of my very first jobs – back when I was in high school – was as a cashier at Carls Jr.  From there, I moved onto Cocos, Sears, JCPenneys, and eventually T.K. Maxx in Ireland.  (Yes, the T.K. is correct).  All of those companies had customer service training programs and many of them had “Secret Shoppers” to verify that service was up to company standards.  While at Carls Jr AND Sears, I happened to be hit by a “Secret Shopper” on at least five occasions and…as you can probably guess…I kicked butt.  I literally got 93% my first secret shop, and then 100% after that.  I got 100% on a Sunday Secret Shop at Sears (our busiest day of the week at the time) where I sold shoes on commission (and I happened to be the highest paid commission associate in my department).  I love the customer service experience, and quite frankly, it is one of the things I miss most by being a back office associate and an independent business owner…you just don’t get to serve the same type of customer service. 

A few years after working at T.K. Maxx, and intrigued by the Secret Shopping Experience, I became a Secret Shopper.  For approximately two years, I learned the Exact Scripts that fast food chains, restaurants, colleges, and even banks teach their employees in order to ensure the perfect customer service experience for their clientele – and to make sure that sales happened.  Big Businesses create these intense customer service training programs for one reason and one reason only: 

Customer Service = Sales. 

Bad Customer Service = Bad Sales. 

Excellent Customer Service = Sales Again and Again and Again as Customers Return For More. 

Good customer service is like being a shepherd with a flock of sheep…the Customer Service Rep must lead the customers to their ideal product(s) like a shepherd leading sheep to water.

Today, I’m going to share the basics that “Big Businesses” are using to create the ultimate customer service retail experience.  The following 10 Steps helps a Company’s Sales Person create a relationship with a customer from the moment they step in the door to the moment they leave.  That relationship will encourage sales more than anything else the store will have to offer – even more than the product itself.  (In fact, read this funny story about the most interesting customer service experience I ever received in order to get a better understanding of this concept entitled, How About Some Illegal Drugs With That Purchase?)

If you read nothing else on this website, bookmark this article.  You’d be amazed when you realize how employees should be treating customers (like you) and how they actually treat customers.  Once you know how Employees at Big Businesses are supposed to behave, you’ll want Excellent Customer Service everywhere you go.

To make things a bit simpler, I’m going to call Customer Service Reps “CSRs” from here on out.

The “Big Business” Basics of Customer Service: 

  1. HandshakeThe Meet and Greet:  In every customer service experience I’ve ever encountered, there is always a “Meet and Greet” time period that is mandated by big companies.  For retail departments like Sears and JCPenneys, a CSR is supposed to greet a customer within THREE MINUTES of strolling into a department.  At fast food drive-ins, it is within ONE MINUTE.  At banks, it’s supposed to be as soon as that door opens, or the customer gets into line.  It is always a good idea to greet a customer ASAP, even if the CSR is busy with another customer.  The greeting could be as simple as “deliberate eye contact” and a nod, but it is better to verbally speak by saying something like, “Hello – my name is…I’m with someone right now, but I will be with you in just a moment.”  (Especially a good idea if the CSR is on the phone.) This type of greeting is often enough to placate even the most demanding of customers.  If you have a grouchy old lady with a bad hip and arthritis demanding service now, she will often be more than happy to wait as long as she knows when she will be served. 
  2. The Inquiry:  After eye contact and/or a verbal greeting, a CSR needs to follow up with the basic inquiry:  “How may I help you today?”  If this question is never asked and a customer is left alone to “find” what they are looking for, they will most likely NOT find it, and they will leave frustrated.  Customers always want “easy shopping” and if a CSR does not offer to make their experience “easy”, they’re out of there.  Give them the opportunity to tell you what they need by simply asking. 
  3. Deliver the Product – NEVER Leave Them to Their Own Devices:  Once the inquiry has been made, it is very important to deliver the product to the customer.  Again, the goal is “EASY shopping,” NOT “Good-Luck-With-That Shopping.”   That means, if you are in a retail business, the CSR should LEAD the customer over to the product, pick it up and hand it to them.  In restaurants, food should be delivered in a timely manner.  In the service industry, a person’s word is their bond; a CSR should live up to whatever promises they make to the customers (within reason, of course).  After all, nothing frustrates a shopper as much as being told, “It’s on Aisle 5”, but then not being able to find that item amongst the multitude of other items in Aisle 5 – or having a restaurant hostess never come back with a drink order “because they thought the waitress delivered it.”  (Am I bitter?  Yes.)  Customers will often assume “It’s sold out” if they don’t see it (or they have been forgotten in the case of the restaurant), and they may or may not ask for further assistance.  By accompanying the customer to a product’s location and/or delivering a product, a CSR has the chance to make sure that sale goes through as it’s supposed to (or “check in the back” if the shelves are empty).   
  4. Ask if They Need Further Assistance:  More often than not, a shopper is looking for ONE specific item, and they will “browse” after they find their item…BUT, it never hurts to ask.  It’s just as common to have a  customer ask for something else once their first need is met.  By simply saying, “Is there anything else I can help you with?”, the CSR increases the odds of a higher final tally on the receipt, while also really pleasing their customer. 
  5. historical shoesSuggest a Complementary Product:  In any business, it is always a good idea to “Suggestive Sell” additional products, especially if the customer says, “I don’t need anything else.”  At Carls Jr., we were encouraged to ask, “Would you like fries with that?” for every meal that did not have fries.  At the Sears shoe department, we were instructed to bring out “at least three pairs of shoes” that were similar in style to the shoe being asked for.  (That way, if the customer did not like the first style / price / fit / etc., they had other options.)  In more than 75% of MY Suggestive Selling cases, I sold the additional product as well as the original product (which is why I was the # 1 Shoe Sales Associate).  It’s the Suggestive Selling that can really help a company’s bottom line, and make a customer happy.  The key, however, is to Give the Customer a Visual Suggestion of a Complementary Product.  At Sears, the customer was able to See AND Touch the additional shoes.  At Carls Jr, saying “Would you like Fries with that (or cookies, or soda)?” instead of “Would you like anything else with that?” gave the customer a mental image of the product, which led them to imagine the food in “their mind’s eye” (i.e. how it would taste).  By giving them that stimulus, whether actual or mental, the CSR stimulates a bigger sale.  
  6. Leave Them to Their Own Devices: After a customer has found what they are looking for, the CSR should back off.  Give the customer time to “browse” and “let their eye buy” more products.  Saying something as simple as – “Okay then…I’ll be right over there if you need anything else.  Again, my name is…just give me a holler” – takes the “buy more stuff” pressure off of a customer (which we all know is the goal) and allows them to relax and shop in peace.  The easier and more peaceful a shopping experience, the more likely the customer is to return to the store soon.  Plus, nobody likes feeling as if “Security” is following them around to make sure they don’t steal something.  Backing off shows a customer that they are trusted. 
  7. Check Back Periodically: Again, another important aspect of customer service.  Checking back within a certain time frame reminds the customer that they are cared about, and that a CSR is at their beck and call should they need it.  Think of it like a waitress in a restaurant.  How annoying is it to get your steak and fries, but there is no steak sauce or ketchup on the table?  Or how about when you’re ready to be “rung up” and the cashier is busy helping someone else.  By not checking back periodically, you deliver the message that the CSR got what they wanted from the customer – presumably a sale – and now they’re done with them.  So again, checking back reminds the customer that they are important every moment that they are in that store.  
  8. Touchscreen ComputerAsk For the Sale:  It’s amazing how many people never ask for the sale.  A commissioned CSR NEVER makes that mistake.  They know that if they don’t ask for the sale, the customer will wander off and find someone else to help them, or put the product back and walk out of the store.  By simply saying, “Can I ring that up for you?”, a CSR again announces that they are at a customer’s beck and call, and they get the chance to make the sale before the customer talks themselves out of it.  In the car industry, car salesmen know that once a customer walks off that lot, they probably won’t see them again (which is why they try so hard to make a great deal before the customer leaves).  Ask for the sale and you increase the chance of actually making it. 
  9. Suggestive Sell Yet Again:  Once a CSR is ringing up a purchase, they have a chance to see what products the customer is buying and suggest complementary products to a different item.  It’s that last minute, “Oh yeah, I should get that too while I’m here,” which can really be successful at increasing every sale.  That’s why the magazines and candy companies pay so much to be at the cash register – because they KNOW someone will think, “I should get that too,” right before they ring up the sale.  
  10. Happy BallThank Them For Their Patronage:  There is a restaurant I’ve been going to for fifteen years (one of my favorite restaurants of all time), and the manager has always said the same thing in all that time.  He says, “See you tomorrow,”…as if I am really coming back tomorrow, and as if he can’t wait to see me.  He even said it to me when I was just an obnoxious teenager.  I know he says it to everyone, but it still makes me feel important that he takes the time and makes sure he says it to me every time I go there (which is a lot).  This is the most important step of making a customer want to come back…common courtesy and the feeling like they matter to that business.  Too many CSRs never say, “Thank you.  Have a nice Day.  I hope I see you again soon.”  Instead, they move onto helping the next customer, inadvertently dismissing the customer standing in front of them.  My rule of thumb is this:  A friendly “Farewell” transfers good feelings from one person to another.  Why wouldn’t you want your customer to leave feeling good?  No matter what, make sure that customer leaves with a smile, and they will return. 

And there you have them.  The 10 Rules of Customer Service that the Big Businesses use.  If you want your customers to return again and again, you need to implement as many of them as possible.  Period.

Now go be a shepherd and lead your customers to their ideal product.

Diary of a Bad, Bad Bookkeeper: Paypal

Betty Bookkeeper Headshot

Dear Diary,

Betty Bookkeeper HeadshotToday I got an intriguing email.  The email was a confirmation from PayPal.  It said that we had spent $150 on an online order.  Since the company does not have a PayPal account, I knew it was a scam – a Phishing Scam, where some con artist is trying to get access to our account.  When you click on the links in the email, you are taken to a fake PayPal page where you are encouraged to log in and verify the purchase (or deny it), and then the fake website captures your real log in details and the con artist can then empty out your PayPal account.  Any good back office person knows – you never click on links in emails from financial websites (because it’s easy to “cloak” the website links).  You always go directly to the original website and log in there. 

Obviously the PayPal notice was a con…but it got me thinking.  Our company does not have a PayPal account…but we could.  It only takes a few minutes to set up, and then you can make payments from any checking account or credit card account that you link to it. 

So I opened one. 

Then, I went online and made a purchase to Office Depot. 

When I checked the bank balance online, I saw that the payment was debited as a PayPal account to Office Depot.  As far as I’m concerned, the explanation from the bank is simple enough to satisfy the boss.  Now, I don’t need to forge checks unless I really want to. 

Now the only question is…what should I buy

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In this mini story, there are actually two cons I’ve brought up:  The Phishing Scam and The PayPal Weak Link. 

The Phishing Scam is an actual scam where a thief sends a fake email encouraging you to click on the link in the email.  By doing so, they can capture your login information and then clean out your bank accounts.  PayPal Emails are the most common financial cons.  After PayPal, sending emails from banks would be the second most common way con artists get information from their victims.

There are three easy ways to spot these scams: 

  1. Banks and financial institutions have standard, precise emails already created that always use the same verbiage.  Phishing emails, on the other hand, often have misspellings and/or sentences that don’t make sense.  If anything doesn’t seem right with any financial institution’s email, it probably isn’t from your financial institution.   
  2. When you open the email, you will see the “From” address is not necessarily from the financial institution it claims to be from.  Whatever is after the “@” sign is the website address.  Anything in addition to the normal address probably means the email is a scam.  (For example:  …@paypal.fakesite.com or …@fakesite.paypal.alerts.com.)  Both the paypal.fakesite.com and the fakesite.paypal.alerts.com are completely fake because whatever comes before the .com is the site.  That means, these sites would be fakesite.com and alerts.com…not PayPal.com.   
  3. And finally, banks and financial institutions openly encourage customers to NOT click on links from their emails because Phishing Scams are so common.  Instead, they will tell you to go directly to their actual website to log in so that you can verify if the email is from the bank or not (and thus the alert is fake or not). 

Also, it’s common to get emails from banks you don’t even have an account with.  If that happens, obviously you can ignore those…but if you are concerned that an embezzler has opened an account in your name, just print out that email and go down to the bank to see if you have an account or not. 

AND when in doubt – go directly to the source…never click on the links in an email from a Financial Institution. 

As for the second con – The PayPal Weak Link: 

It is very, very easy to open a PayPal account and link it to a checking account…any checking account.  PayPal has a very simple verification process, which means that creating a PayPal account is easy for anyone with access to your checking account information, including your bookkeeper.  From there, it is very easy to steal money because PayPal and the bank account link together in order to create instant money transfers.  Plus, money can be sent to anyone with another PayPal account, and everyone takes PayPal these days (including airlines and other travel agencies), so stealing becomes very easy.

Therefore, to protect yourself from someone linking a PayPal account to YOUR checking account, you need to link it first.  In other words, you need to be the one to create a PayPal account with your checking account.  PayPal only allows a checking account to be linked ONCE, which means no one else can use the checking account information.  Once you have linked it, keep that information to yourself.  There’s no need to share it with your bookkeeper or anyone else because business’s should stick to using Bank Bill Pay and writing checks…Period.  PayPal should only be used by one person…the creator of that account.

Thus, if you don’t have a PayPal account, start one immediately in order to protect your checking account.  If PayPal does NOT let you create a PayPal account, then an embezzler has already linked to your checking account, and you need to consider closing it.  This is one of those huge companies that you just can’t avoid, and you really shouldn’t avoid. 

Diary of a Bad, Bad Bookkeeper: Men Suck!

Betty Bookkeeper Headshot

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Dear Diary,

Today was another, “Not so great day”…but this time it was one for the books.

Today, when I went to work, I wasn’t feeling so hot.  In fact, I ended up puking into my office trash can just as the boss walked in.

Betty Bookkeeper Headshot“Hey,” he says to me, looking concerned.  “You’re sick?  You shouldn’t be here if you’re sick.  Go home!”

“She was sick yesterday too,” the traitor receptionist chimed in from behind him.  “She’s been sick for a while.”

“Have you been to a doctor?” the boss asked me.

“No.  I don’t need to go to the doctor, okay!”  I snapped.  “I’m fine.”

“You’re three shades of green,” he countered.  “You should definitely go home.  You may have the flu.  Or even worse, food poisoning.  In fact, I insist you go home until you get better.”

The receptionist gave me a triumphant smile from over his shoulder.  The witch never liked me.

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“I won’t get better for another eight months, alright!” I bit out, my eyes narrowing at her.

The receptionist’s eyes widened.  She understood right away.

My boss didn’t get it, of course.  He never does.  “Why do you say that?  What happens in eight months?”

“That’s when she has a baby,” the receptionist chimed in.

The boss’s eyes widened, his expression immediately going to my still-flat belly.  “You’re pregnant?”

“Yes, I am,” I growled.  And I don’t know who the father is, I silently added.  It was either my husband (who would be over the moon if he thought I was pregnant), or Ernie (the employee who had blackmailed me into looking the other way while he stole from the company…let’s just say that things have progressed between us).  If it’s Ernie’s baby…well, he’d probably be thrilled too.

Men Suck!

“That’s fantastic!” the boss said.

You suck too!

His expression changed as he looked at me though.  I could see the exact moment when he realized this was going to affect my place in the company sometime in the near future.

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Heading him off, I said, “But you don’t need to worry about me missing any work.  I’m not much of a stay-at-home mom.  I won’t need more than a few days off from work when the time comes.”

His face twisted.  “Are you kidding?  That’s a very important time in a child’s life.  It’s when they bond with their child.  You’ll want more than a few days off of work.”

“You forget…I have two children already.  There’s no way on Earth I want to spend any more time with a child.  Trust me.  I’ll be back for work fairly quickly.”

“Oh don’t be foolish,” the receptionist chimed in.  “You’ll definitely want time off.  And I know just the place to call to get a temp in here.”

Did I mention I hate the receptionist?

“That sounds like a good idea,” the boss said, smiling at her like she was brilliant.  “Why don’t you call them and see how much they cost.”  Turning back to me, he says, “And you don’t worry about anything, Betty.  When the time comes, you’re job will be here.  We love having you here.  You take all the time you need to bond with your baby.  In the meantime, can I get you something?  Are you hungry?”

I could feel my teeth grinding.  “I’m fine.”

“Well then, I guess I’ll let you get back to work.  You take it easy.  And don’t worry about the trash.  I’ll send Ernie in to empty that for you.”

Then the boss left, shuffling the receptionist off with him.

So now I’m freaking out.  Time off?   I can’t take time off.  What if someone catches onto what I’m doing?  What if the next bookkeeper is better than me?  What am I going to do?

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A Warning Sign

avatar_2_edited2

While this article is a bit more of a dramatization then I usually go for, there is a point here.  The point is, this is a warning sign:

Whenever a bookkeeper doesn’t want to take a vacation, maternity leave, or even call in sick…it could be a warning sign.

You see…good bookkeepers aren’t worried about people going through their offices, whether other staff or other bookkeepers.  Good bookkeepers make themselves replaceable at all times (in my opinion).  The best bookkeepers have nothing to hide or fear.

Embezzling bookkeepers, on the other hand, fear anyone going through their paperwork, their computer files, and sometimes even their filing cabinets.  They fear being caught all the time.  Taking time off for maternity leave or going on vacation is often when they get caught.  Instead, they spend as much time in the office as they can, protecting the terrible things they’ve done, as well as their secrets.

How to Know For Sure

As always, if you are concerned that your bookkeeper is embezzling from you, hire someone to look more closely at your books.  Accountants do not do this unless asked.  Virtual Bookkeepers or Independent Bookkeepers are an excellent source for looking for fraudulent activity.

Start by getting a backup of your bookkeeping program when your bookkeeper is not around, and send it to the hired auditor.  Also get copies of your bank statements.  These two things will help them get started looking for embezzlement.  From there, they will either ask for copies of suspicious checks, credit card statements, receipts…and any number of things.

The key is…if you suspect, don’t site blindly by.  Take this as a warning sign and ask someone for help.  It’s better to spend a few hundred dollars hiring an auditor then to lose thousands and thousands to an embezzler.