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.

How to Make QuickBooks Enter Transactions For You

If you’ve already gotten OUR EBOOK: “How To Do A Year’s Worth Of Bookkeeping In One Day”, then you’ll probably already know how to do this step.  This excerpt is straight from that eBook with only a few modifications for those who haven’t read the book yet.

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Do you have a lot of transactions that repeat from day to day, week to week, month to month in your business?  What about repeating transactions that need to happen once or twice a month?  I’m sure you do.  After all, if you have to pay rent, or make a car payment, then you have a repeating transaction.  But what about invoices or sales receipts?  Do you bill any of your customers the same amount monthly, weekly, daily?  How about deposits?  Do you receive a specific preset amount of money on a timely basis (like an insurance payment, disability, social security, or just a flat fee for services rendered)?  What about vendor bills or credit card entries that are charged to your account every month?

All of these things, no matter how big or small, can be “Memorized” by QuickBooks.  In other words, you can set them up so that QuickBooks does the data entry for you.  It’s really easy.  All you do is set up the transaction as if you are about to enter it, then “Memorize” it.  Once you do, QuickBooks will automatically enter the transaction as a check, bill, invoice, deposit, etc., as soon as the date you preset passes.  Then, when you open QuickBooks after that date, you will be notified that the transaction(s) have been entered.  This one little step can save hundreds and even thousands of minutes in data entry time.

Here’s how to “Memorize” a Transaction in QuickBooks:

  1. Create your transaction, but do NOT press “Okay” / “Enter” / “Save and Close.”  (You can also pull up a transaction you’ve already saved if you don’t want to re-enter the information.)
  2. With the transaction open, Press Ctrl + M.
  3. The screen that pops up should look something like this:
  4. Choose “Enter Automatically”, then the frequency (weekly, monthly, quarterly, etc.) under the “How Often” section.
  5. Choose the next date you want the transaction entered (which is going to be the transaction for the NEXT month – Thus, you would choose February if you are entering January’s transaction).
  6. Choose the number of transactions remaining (which is useful for items such as car payments that are only paid for three years), and the number of days to enter the transaction in advance if you’re going to mail that transaction in the future.
  7. Click “OK” to return to the Original Transaction.
  8. Press Ctrl + Enter to Save That Transaction for THAT MONTH.
  9. That’s it.  The next time that entry needs to be entered, QuickBooks will enter it when you open the program.

Quick Important Note:  Once the transaction is Memorized, you can simply Close and then Reopen QuickBooks and QuickBooks will automatically enter ALL of those transaction from the first entry up to TODAY. That means, if you create an entry for January of 2007, but it’s May of 2010, this transaction will be entered multiple times until all of the transactions have been entered up until today’s date.  What this means for anyone who’s behind on their bookkeeping is that they only need to memorize one of each transaction and amount, then close and open QuickBooks to become instantly up to date.

Now go forth and take advantage of this fabulous tool. It will save you OODLES of time!

Let me know how it works for you.

The Best Printers for Small Businesses

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The following is an excerpt from our newest ebook “How To Start A Lucrative Virtual Bookkeeping Business” which we are launching on June 30th, 2010 and are currently pre-selling for 50% off. While the advice is intended for small bookkeeping business owners, in my opinion, it works for anyone who runs a small business.  I would love to get your feedback and hear any comments on printers you love.  So, if you have any feedback, please leave a comment below.

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  1. Get a Multi-Function Printer.  You want to look for a Multi-Function Printer versus a regular printer because like I said before, you will have limited space.  You want it to have a “Flatbed” because you will be scanning paperwork.  You also want it to be able to “Feed” a lot of papers through the scanner at once because you will be faxing a lot of paperwork. In fact, the feed is one of the most important features to look at… don’t skimp here.  A wimpy feed will mean lots of paper jams, lots of frustration, a few choice curse words, a whole lot of equipment violence, and eventually, a whole lot of time wasted manually feeding your pages one at a time.  (Which sucks, believe me!)  Save yourself the headache and pony up the extra $10-$50 for a better feeding option.
    1. a. Features to Look for in a Multifunction Printer:
      1. i.      Laser Printers versus Inkjet Printers:
  • Laser printers mean toner cartridges.  That is a lot more expensive then Inkjet cartridges, and usually larger in size, but they print faster, and they print more copies before they have to be replaced.  In addition, the printer costs more money, especially if you go for the Color Laser printer, but the print quality is excellent, and if you don’t mind pony-ing up $100 every time you have to buy replacement cartridges, then a laser printer is a great option.
  • Inkjet Printers:  Both the printer and the cartridges cost less….period.  The quality can be really good, but you will buy cartridges more often (although the prices can be as low as $5 each).  You will probably also have to do a “head cleaning” more often on an Inkjet Printer, but this is the more affordable choice when starting any new business.

  1. ii.      Replacement Cartridges:  Before you buy any printer, always pop over to the cartridge aisle and see how much the replacement cartridges are.  You may also want to check a website like www.123Inkjets.com where you can save as much as 80% on the generic versions.  Just the cost of the cartridges alone could be a reason NOT to buy whatever printer you’re looking at, no matter how cheap the printer is.  For example, Lexmarks are generally the cheapest printers you can find, but they’re cartridges cost just a little less than the printer itself.  On top of that, the cartridges don’t print a whole lot of documents before the cartridge has to be replaced – so these are only good deals for people who don’t print a lot.  You…as a VIRTUAL bookkeeper… ARE going to print – a lot.  So take the price of the cartridges seriously.
  2. iii.      A Good Feeder:  This is a must-have for a bookkeeper.  You are going to be faxing, scanning and copying a lot of documents at once.  If you have a wimpy feeder, then you can expect paper jams or an early death to your MFC printer.  Therefore, make sure you look at how many papers you can feed at once.  This information will be listed in the printer’s details or on the box itself.

  1. iv.      A Flatbed Scanner:  A lot of Business Owners think that having a machine with only a feeder (like a fax machine) is a great low-cost option, but the truth is, it’s a bad option for bookkeeping.  Bookkeepers need to make copies of checks, bills, tax forms, books, and all sorts of odd-shaped papers.  It’s a whole heck of a lot easier to have a flatbed that can handle odd shapes and sizes so you can scan portions, if necessary, and put the scans back together on a computer.  Therefore, get both the feeder and the scanner model.

  1. v.      A Fax Machine:  You’d be amazed how many multi-function printers are still made without a fax machine.  But the truth is, a fax machine is a Virtual Bookkeeper’s best friend.  You will be sending a lot of paperwork to your clients via email or fax, and having a fax machine lets you do both.  Be smart and check for this feature right from the beginning.

  1. vi.      All in all, we prefer the Brother printers.  The cartridges are cheap (at least in comparison to other toner and inkjet cartridges), it feeds paper fairly quickly, and it prints an excellent quality at a good speed.  However, keep in mind that not all Brother Printers are created equally.  The cheap ones don’t feed a lot of paper at once.  So, look for something that looks like these (notice the feeds are angled upward to hold more pages):

But avoid ones that look these because these feeds aren’t that great (notice the feeds are flat, and thus usually fit and/or feed fewer pages).

A Good Rule-of-Thumb is:  The more pages they feed at once, the better.

Laptop Features to Consider For Small Businesses

The following is an excerpt from our eBook, “How to Start a Lucrative Virtual Bookkeeping Business.”

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One of the things I see a lot of when it comes to bookkeeping is laptops…lots of laptops.  Some work incredibly well (whether for bookkeeping or anything else) while others work horribly.  Thus, I have compiled a list of features to consider when shopping for any laptop, whether for bookkeeping alone, or for business in general.

(If you have any further recommendations, please leave them in the comments so that other readers will know what to consider.)

  1. Must-Have Features For Your Bookkeeping Laptop:
    • A DVD Burner:  Don’t be cheap and skip the DVD burner in lieu of a CD Burner; they are not the same thing.  CD’s can only burn a fraction of the information a DVD can burn, and you will want to give your clients DVDs when you back up their work.
    • An SD Card Slot:  This will come in handy whenever you need to transfer digital files from a camera to your computer.  Although it may not make much sense now, you’ll be glad you have it later.
    • Bluetooth Access:  It just comes in handy.
    • Wireless Access: You will want to be able to get on the Internet anywhere, especially coffee shops.  In fact, you may even consider signing up for a monthly service from AT&T or Sprint so that you can get Internet access from the middle of a field, if you so chose.
  2. Optional Features For Your Laptop To Consider:
    • A 10-Key Keyboard:  The reason I have NOT made this a “Must-Have” feature is because this is actually a “Preference” choice more than anything.  Yes, it can be incredibly handy to have your 10-Key right on your keyboard when you open your laptop, but the problem is, a Laptop with a 10-Key Keyboard is a very heavy laptop.  It can add an extra 5 to 10 pounds of weight, and it can add a couple hundred dollars to the price tag.  If you buy this kind of laptop, you will also probably end up investing in a bag with wheels just to tote the thing around.  So now, you have a heavy laptop with a heavy AND bulky bag that you have to schlep from house to car to office and back.  On the other hand, you can buy a 10-Key Keypad that plugs directly into your laptop for a cost of $10 to $20, or a Bluetooth 10-Key Keypad for $30 to $40.  These are compact, lightweight, and can fit right in the pocket of any computer bag.  On top of that, you can buy a computer that weighs as little as five pounds, and now taking your computer with you is no longer a hassle.  So, make the decision for yourself on how important that 10-Key is before you buy a laptop.  (Notice, the Kensington keypad-with-calculator to the left has a calculator screen on it as well, which allows you to quickly tally numbers without having to access your computer.)
    • LightScribe Burner:  If you’ve never seen a Burnt LightScribe CD or DVD, you are missing out.  This feature allows you to burn any picture or text on the top of a certain type of CD and DVD, and can really give you (and your business) a very professional image.  Imagine giving your clients a Backup Disc with their Company Name, Logo and date on it.  You will convince your Clients you spend a lot of time and money to produce high-quality products, even when you don’t.  This feature does not come standard on all laptops, but is usually only $25 more if you’re buying a “custom computer.”  So, if you want to give an appearance of being Professional and “Tech-Savvy,” add this feature…you won’t regret it.  (Because quite frankly, if you’re not doing it now, your competitors will be doing it soon.)
  3. My Laptop Recommendations:

 

  1. AVOID AT ALL COSTS:  One of the benefits about being an Independent Bookkeeper is that you see a LOT of computers.  As such, I would NEVER recommend a Compaq (even though it’s made by HP) or a Gateway.  I’ve seen major issues with Compaqs, and I’ve heard Gateway has the worst customer service when a problem arises (this from a very computer savvy person).  Acers are super-cheap options, but there’s a reason for that…they won’t work well with a whole lot of business programs.  The IBMs I’ve seen have been heavy, awkward and incredibly expensive, but aren’t really any fancier than a Toshiba.  Dells are great because they’re inexpensive, you can customize them, and they have decent customer service, but I’ve seen more Dells freeze up than not and then you have to do a “hard reboot.”  But again, your laptop choice is always a preference thing.
  2. ALSO AVOID: Mini Netbooks.  While Netbooks are a fabulous deal price-wise, they are not good choices for a business.  For one thing, the keyboards are small, which makes it hard to type (and EXTREMELY curse-worthy if you type a lot).  For another, there are usually NO DVD/CD Burners, only USB ports.  And for a third, without a DVD drive, it is nearly impossible to get many computer programs on the laptop – including QuickBooks.  I have tried to download QuickBooks onto computers from the internet before, but even with the QuickBooks key code, you really need the disks to install the program.  So skip the Netbooks for your business and go with something larger.
  3. To find the best price on a laptop: If I don’t buy my laptop from the manufacturer’s website, then I like to go Best Buy or Office Depot.  They often have incredible sales and decent financing.  On top of that, you can usually take your computer to Best Buy if you need to get something fixed, and Office Depot now offers free computer check-ups whether you buy from them or not.  Check their catalogs regularly and you will be amazed at the deals.

Diary of a Bad, Bad Bookkeeper: A Warning Sign

Betty Bookkeeper Headshot

Dear Diary,

Betty Bookkeeper HeadshotToday sucked… and I mean, straight up sucked.

There I was, minding my own business, when in walks the boss with a receipt. On the receipt are stamped the letters C.O.D. It was from one of our vendors that apparently hasn’t been paid in so long, they’ve changed our account from credit to C.O.D.

“What is this, Betty?” the boss asked me. “Why has ABC Hardware turned our credit account into a Cash-on-Delivery account? I’ve been with them for five years, and they’re saying we’re three months behind in our payments. I told Bill – the boss over there – that it can’t be right. We’ve never missed a payment with them, but their bookkeeper swears we’re late. What’s going on?”

I looked at him as innocently as I could, and shrugged. “It has to be a mistake, Boss. I’m certain we’re current.”

“Can you call them and fix this, please?”

“Sure. No problem.”

Then, the boss practically tosses the bill at me and storms out of my office.

I picked up the phone line, figuring he’d probably be watching the extension from his office to make sure I called, but I didn’t bother dialing the number right away. I knew the truth – we were behind. I should have made that payment a while ago, but I knew if I sent it, the checking account would go in the hole. Since I wasn’t quite sure how far behind we were, I figured I’d better check.

Typing a few things into the computer, I saw that we were about $1,200 behind. That wasn’t too bad. So I did actually call the bookkeeper over at ABC Hardware. When she got on the phone, I said, “Hey, Jane. How’s it going?”

“Betty,” she said coldly.

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A few choice words ran through my head, but of course I kept them to myself. “Listen, Jane. I just got reamed by my boss about some notice he got from your company. He said you made our account a C.O.D. account. What’s up with that?”

“Well, Betty, you’re company’s late in paying us. And it’s not the first time.”

“Well, Jane… I just mailed a check for $1,200 a couple days ago. Have you checked your mail today?”

“’The check’s in the mail?’ Really, Betty? You’ve used that one before. And then we never got the check. So my boss decided to make your account C.O.D. from now on. Besides, you owe us $3,100 – not $1,200.”

No kidding. “Are you sure about that? I only have invoices for $1,200.”

“I’m sure. In fact, I emailed you and faxed you hard copies of the invoices several times over the last couple months.”

The temptation to hang up on her was irresistible, but I didn’t. “Well, I’m sorry, but I don’t know what happened to the invoices. And I did send you $1,200 just a couple days ago. So, what’s it going to take to forget this whole C.O.D. thing?”

“If you want the account to revert back to a credit account, you need to pay the balance in full immediately. That’s the only way.”

“Okay. I can do that. I’ll put a check in the mail today.”

“No, that’s alright. I’ll come and pick it up.”

Of course you will, you snotty… “Okie dokie. How about five o’ clock? I can have a check for you by then.” And the boss will be gone by four, so he’ll never see the real balance due.

“Fine, see you at five.” Then, she actually hung up on me.

Long story short, I had to scramble and figure out a way to pay $3,100 without letting the boss know what was going on. It took me a bit, but I finally figured out that I could write a balance transfer check from one of the new credit cards I opened in the company’s name…a credit card that goes to the Company P.O. Box the boss doesn’t know about.

I told the boss it was just a misunderstanding, and that Jane actually found our payment in the mail that day…so there should be no problem from now on. The boss went back to thinking I’m a genius, and Jane showed up at 4:45 – Eager twit.

All I have to say now is: Man, that was a close call!

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Why This is a Warning Sign

superhero_edited_no_maskA lot of small business owners don’t realize it, but when a credit account is changed to a C.O.D. account, that’s usually a BIG warning sign that “the business is suffering”. (Notice, I’m NOT saying anyone’s embezzling…this is quite simply a sign that the business needs to handle their finances better, and possibly their cash better as well.) Most vendors that offer credit to their preferred clients are loathe to take that line of credit away if it means they might lose a business as a customer. Usually, the only reason a vendor would change a credit account is if there is a history of serious delinquency or bounced checks. So the minute any vendor demands a COD payment, realize that your company’s credit history is on shaky ground and become proactive.

How to Know for Sure

Should the above scenario happen to your company, don’t go running to your bookkeeper first. Instead, ask the bookkeeper at your vendor’s company to print up a Statement of at least 90 days to 6 months so that you have a record of EXACTLY how your bookkeeper has been paying them. Look it over and take note of how far apart the payments are. Are there any amounts that were subtracted and added back on? (That could be the sign of a bounced check.) Most credit accounts require a minimum of one payment a month, while some require more. Ask the other bookkeeper what the terms are for your company, and THEN approach your bookkeeper.

Before you make any accusations, however, there is one more thing you can do to double check your bookkeeper. When you have the Vendor’s Statement for your company in hand, ask your bookkeeper for the last three bank statements. Also, ask for a “Check Detail” listing all of the checks for the same three months. A good bookkeeper will know exactly where those bank statements are and will be able to give you both documents in less than 10 minutes. (The key is to ask for this information immediately and DO NOT let your bookkeeper put you off ‘til the end of the day…they can cover their tracks if given too much time.) Then, when you have the Vendor Statement, the Check Detail, and the Bank Statements in your hand, do a quick check for the following:

  • Highlight the check numbers listed on your Vendor Statement.
  • Find the corresponding check numbers on your Check Detail printout. From here, you will be able to tell exactly when the check was supposed to have been printed and then mailed. The dates should be a week apart if the vendor is in town…up to 10 days if the vendor. (Of course, the time it takes to cash a check also depends on how big the vendor is.)
  • Now check the bank statements for the same check numbers. Do the dollar amounts actually match, and when were the checks cashed? Sometimes, the other company may hold onto the check for any number of reasons, but it will give you a good idea of how long the check cashing process takes with THAT particular vendor…and how long your bookkeeper may be holding checks.

Your Bookkeeper May Be Embezzling if…

Now, before I tell you exactly what to look for as far as embezzling goes, let me just say one thing. This does NOT 100% mean that your bookkeeper is embezzling. There can be reasons for any discrepancies you find. However, if you do find the following discrepancies, don’t be stupid and sit on your hands either. Ask an accountant or an independent bookkeeping company for help immediately. Make a backup of your bookkeeping program without the bookkeeper’s knowledge, and put that aside…(you may need it later).

And whatever else you do… DO NOT…I repeat… DO NOT confront your bookkeeper with what you find. If your bookkeeper IS an embezzler, the MINUTE you accuse them of anything, they will WIPE their hard drive, and your bookkeeping program, and they will destroy any evidence of embezzlement you may have in your office. Be certain first, and then do a cold hard lockout. The minute you KNOW – without a doubt – that they’re embezzling, DO NOT let them back in the office, and disconnect the bookkeeping computer from the internet. (You don’t want them logging on remotely to destroy your bookkeeping program.)

  • To know if your bookkeeper might be embezzling, look at the Check Run and look at the Bank Statements. Do the check numbers and amounts match? Bookkeepers can always go in and change the check names and amounts later on (which they will do if they want to show the boss an inflated bank balance), but the Bank Statements will give them away every time.
  • Another thing to pay attention to…are the checks being cashed months after they were written? If they are, then your bookkeeper was sitting on them for some reason (probably to make sure they didn’t bounce)…but keep in mind, YOU may have told your bookkeeper to hold those checks. That happens a lot, so don’t make any accusations unless you’re sure you did NOT ask the checks to be held.

Again, this is just a warning sign, but it’s a good sign to look for. Do not ignore it.

 

Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

Betty Bookkeeper Headshot

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I got a new credit card today. Well, technically, I got a new “company credit card” today. When the boss wasn’t around, I went ahead and called his credit card company and told them we had lost his company card and needed a new one. They asked me for all of the usual identifying information – social security number, mother’s maiden name, address, phone, account number, etc. – and of course, I gave the guy on the other end of the line all of that information. I then told him that I wanted to change the password question “because the last bookkeeper got fired, and we need to protect my boss’s identity.”

The guy at the credit card company didn’t even miss a beat – after all, companies get new bookkeepers all the time. “Which question would you like?” the guy asked me. “Do you want a question about your high school, pets, favorite cities…” and on and on and on.

“How about the question about pets,” I answered innocently.

“Okay. What is your pet’s name?” he asked.

I thought really quickly, then answered, “Moron.”

“Excuse me,” the guy on the phone said.

“My pet’s name is Moron,” I repeated sincerely. What I wanted to add was – “and Moron’s my boss” – but I managed to hold my tongue… barely. It was so hard.

“Okay. Moron it is,” the guy said in a serious tone while clicking away at the keys on the other end of the phone.  “Anything else I can help you with?”

“Oh. I almost forgot,” I added. “Our office has moved. The address I gave you was for the old address. The new address and phone number is…” and then I gave him my home address and personal cell number.

Again, I heard clicking on the other end of the line as the poor dupe updated my boss’s “new information.” When he was done, he said, “You should get that credit card in the mail by…”, which turned out was today.

So, I swung by my house and checked the mail during lunch. The card was already there. So I went ahead and treated myself to lunch – on the boss, of course. After all, he doesn’t pay me nearly enough for all the excellent work I do for him. And since the boss never opens the mail – especially that particular credit card bill– what he doesn’t know what hurt him.

I wonder what I’ll buy tomorrow… Maybe some new earrings. I’ve always wanted pearls…

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How to Prevent this Kind of Bookkeeper Theft:

You would not believe how incredibly frustrating it is to call into your credit card company and find out that all of your password information has been changed. Not only can your password info be changed, but some people even go so far as to change the “mother’s maiden name” question. Of course, the simplest way to stop this is to catch it early. You can do so by doing the following:

  • Open your credit card statements, or check your transactions online regularly. If anything seems questionable – no matter how small or large – call the credit card company immediately and ask them how many cards they’ve sent out. You can also verify that your security information is still what you originally created.
  • If they tell you your password information has changed, be sure to throw a high holy conniption fit and demand to speak to an account manager or “their boss.” Get this account closed immediately because whoever has your card can still make purchases even while you’re on the line. They will send you a new credit card with a new credit card number within a matter of days.
  • Get copies of your three credit reports as soon as you possibly can because – quite frankly – if your private information has been changed, there’s nothing to keep them from signing up for more credit cards at vendors you may never even have heard of. But, the good news is that every single one of those stolen cards will show up on your credit reports!, but not always all three of the reports, which is why you should spend the extra money to access all three. (In fact, for $14.95 a month at Transunion, you can actually access those three reports and credit scores for free every month. It may be worth it if you ever find yourself a victim of identity fraud.)
  • If a credit card company calls you and says there is questionable activity on your account, get online immediately and see what they are talking about. If they are contacting you, they are probably seeing something they’ve never seen on your account before. So even if you have your credit card on you, it never hurts to double check whatever charges they’re concerned about.
  • And lastly, make sure you know where ALL cards are at all times. I once had a client who ordered a card for his wife – a card which never arrived. It turned out, someone stole it from his mailbox and was shopping with it in the next town and my client never knew. Luckily, I caught it with the very next credit card statement when I asked for receipts that matched the charges, and we realized immediately what had happened. So even though the thief had managed to steal more than $7,000 in 15 short days, my client was not liable for a penny, especially because he disputed the charges right away. (Which is another good reason to check those statements every month.)

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Click Here to read the Previous Entry: Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 55) – The Sister Company Scam


Diary of a Bad, Bad Bookkeeper (Day 30) – The Double Payday Scam

Dear Diary,

Today was payday – the second since I’ve been here.  I figured it was about time to test the Double Payday Scam – to see if my boss would actually catch me.

So, I started the day by doing the Payroll.  Just like two weeks ago, I created and took all of the paychecks to the boss to sign.  He signed them, with only the occasional request to see a corresponding timecard…then he signed mine without question.

I took the checks back to my office and set mine aside.  Then, I printed up another paycheck that I took back to him.

“What’s this?” he asked me, glancing briefly at my double payday.

“It’s a replacement check.  I double-checked my income and realized that I had entered my withholdings incorrectly, and QuickBooks took out too much in taxes.  So I voided the other one and reprinted this one.”

“Okay,” he said, shrugging and then signing my check.

And just like that – Double payday.  If he had asked me to produce the voided check, I would have gone back to my office and voided the first check… but since he didn’t, he’ll never know.  Even if he opens the bank statement (which let’s face it, he probably won’t), he’ll see the extra paycheck and think he’s just looked at the same check twice.

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How to Catch the Double Payday Scam:

All a small business owner has to do to catch the Double Payday Scam is to ask to see the voided check, or to insist that you will void all checks personally.  They can then refile the checks, and you have protected yourself… it’s that simple.

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Click Here to Read the previous entry:  Diary of a Bad, Bad Bookkeeper (Day 14) – The Carnage Begins

Click Here to Read the Next Entry:  Diary of a Bad, Bad Bookkeeper (Day 40) – Stealing the Boss’s Identity

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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.