More Helpful Tools Provided By The Business Coach

Fraud and Theft Guard #8 – As a business coach, I learned you need to set up guardrails to control your cash.

You need to make sure that your business bank statements are mailed to your home. As a business owner, you should open and review your bank statement in great detail so that your bookkeeper knows you are watching him. Highlight any aspects of your bank statement that seem incorrect or off in any way.

Mystic Statistic:
“Workers’ comp fraud accounts for about 1 percent to 2 percent of all workers’ comp payments, according to J. Paul Leigh, a professor of the University of California, Davis.”

Fraud and Theft Guard #9 – Engage in the habit of doing monthly bank statement reconciliations

In a perfect world, you will do these monthly bank statement reconciliations with someone who is not the person responsible for making your ongoing bank deposits. As a business coach, I have learned that the key here is to trust no one. Honest people make accidental mistakes; dishonest people make intentional mistakes.

Fun Fact:
The Pope John XII was deposed by the Roman Emperor Otto in 963 for stealing church offerings amongst other more scandalous activities. He was reported to have died from a stroke while in bed with a married woman.

Fraud and Theft Guard #10 – Set up a post office box for your accounts receivable to be mailed to

One often overlooked super move that can dramatically decrease the chance for your company to experience fraud and theft is to make sure that your accounts receivable (money owed to you) are mailed to a specific PO Box that is different from your office mail address.

Fun Fact:
“One out of three companies that go bankrupt each year do so as a result of employee theft. Almost 80 percent of workers admit that they have or would consider stealing from their employers.”

Fraud and Theft Guard #11 – Set up a sweep account

A sweep account is simply an account that has a somewhat loose financial controls into which you place money received from customer payments. At the end of each week you should transfer / sweep all of the money out of your sweep account and place it into a second account that is super secure and that offers much tighter financial controls, where you as the owner and your spouse are the only people authorized to access the funds. Do not blindly trust people with your banking information or you will be taken advantage of.

Fun Fact:
“Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%… Right now, as many as 30 million Americans are either out of work or severely underemployed.”

Fraud and Theft Guard #12 – Do not keep pre-signed blank checks around to be used as you see fit in the future

Keeping pre-signed blank checks around to be used as you see fit in the future will end in your certain financial demise. At some point, you will be taken advantage of as somebody other than you gains access to these checks and uses them without your permission. This will end badly 100% of the time. As a business coach, I know that if you are doing this, stop.

“Anything that can go wrong, will go wrong.”
-Edward Murphy, Jr.
(The American aerospace engineer whose life was spent developing safety systems for the aerospace industry. He is the man for whom Murphy’s Law is named.)

Fraud and Theft Guard #13 – Only allow senior management to write-off losses

It’s very important that you only allow yourself or members of your senior leadership team to write-off losses. When you write-off a loss from a client who has simply chosen not to pay you, this is very bad. Writing off bad debt from your clients is not a good thing. When you do this, you typically negate the profit you made or would have made on ten deals. Don’t allow the writing off of bad debt to become a casual thing.

“Casualness causes casualties.”
-Tim Redmond
(Thrive15.com Mentor, a business coach, and the man who helped grow Tax and Accounting Software Company from two employees to over 450 employees; the company was eventually sold to Intuit for a whopping $120 million)

Fraud and Theft Guard #14 – Always use pre-numbered accounts receivable invoices and keep an accurate invoice log

Mystic Statistic:
“24% of respondents said they had detected an increase in stolen nonmonetary items, such as retail products and office supplies”

Using pre-numbered invoices while maintaining an accurate invoice prepares you for when bad things happen, and they will. When a problem occurs, you will be able to find the source of the problem much easier when implement these systems. Choosing not to follow these systems will turn the very bad day when fraud was discovered into the very bad month during which you spend every waking hour attempting to track your documents so you can figure out what happened.

Fraud and Theft Guard #15 – Require senior management to review the accounts payable each week

Not Fun Fact:
“Stateside… employee theft accounts for 43% of lost revenue.”

It’s very important that your senior management sign off on the payment of accounts payable to prevent your business from paying for services and products that you did not buy and to prevent your business from paying fake invoices altogether. Over my years as a business coach, I have witnessed scenarios in which a well-meaning bookkeeper paid invoices that were fake and not associated with an actual order of a product or service by the company. In fact, I know of one instance in which a bottom feeding businesses was prosecuted for routinely invoicing their former customers for small amounts. They would write “past due” on the invoices and simply send out these bogus invoices to thousands of customers at a time. Unsuspecting bookkeepers who were allowed to pay invoices of $200 or less without management’s approval simply paid these like any other invoice. This fraudulent company was able to generate thousands and thousands of dollars of revenue by invoicing these oblivious business owners for small amounts each month. You must insist that your senior management signs off on the payment of all accounts payable each week to ensure that you’re only paying what you actually owe.