Monique Lusse | equitybydesign

Employee Screw-ups and the Cost to You

August 7, 2017 by Monique Lusse Leave a Comment

My article last week, When An Employee Screws Up, Whose Fault Is It? tapped into some kind of mini-zeitgeist.

The day after it was posted, one of my coaches, Christine Kane, sent this out to her list: What Exactly to Do When an Employee Screws Up. Step #2.2 is what I’m talking about.

And then this morning I open my email to this from Michael Hyatt, 13 Ways to Make Your Employees Pull Their Hair Out. #11 on his list is what got me started on my post.

There are financial ramifications to all this, and I’m gonna talk about them in this coming Wednesday post. Treating people well is not just the right thing to do, it actually has measurable ROI.

Thanks for being part of my tribe. Consciously designing equity and fairness into the fabric of your business is how you do well by doing good. Hit me up for a free Financial Clarity Call to see how we can do this together.

To your financial freedom,

Monique

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When An Employee Screws Up, Whose Fault Is It?

August 2, 2017 by Monique Lusse Leave a Comment

Image: “Waiting for the Flatbed” by Monique Lusse

Today was the day that the Salvation Army was coming to pick up a bunch of my mom’s furniture. I inherited her stuff, all her stuff, when she died last year. I understand now why many traditional cultures have a period of mourning, at least a year. Took me that long to get out of grief brain and make decisions about what to keep and what to let go of. I had been waiting for this day since I scheduled the pickup at the end of June.

Called their automated line at 7.30am this morning to find out what my 3-hour window was gonna be: 8-11am.

Fantastic.

Noon rolled around and still no truck. I called, got in the queue to talk to Customer Service, found out there were 22 people ahead of me; I hung up and called back later.

Got a lovely woman (after she talked to the five people ahead of me.) “Oh, we don’t pick up in Bonny Doon.” (rural region up narrow winding roads in the Santa Cruz mountains in California.)

Three deep breaths while I experienced an immediate surge of anger and let it pass on through.

“I specifically told the gal I made this appointment with back on June 26th that I lived in Bonny Doon and I asked her specifically if they came up this far because not many charities will and she said,’ no problem’.”

The very nice woman today repeated, “I’m sorry, but we don’t service that area.”

Three more deep breaths.

“May I speak with your supervisor, please?” I asked.

Jennifer, her supervisor, came on the phone after a long bit, and I explained it all to her. She said she’d have to listen to the tape of that June call and get back to me in 1/2 an hour, one hour tops.

She did.

Now here’s the point of this whole story. Her response.

“It clearly wasn’t handled properly. I will write this up and submit it to her supervisor and it’ll go into her permanent record and she will be reprimanded. She clearly didn’t respond to the prompts from the system to ask you where in the 95060 zip code you are because we don’t go above the university (UC Santa Cruz). And I’m sorry, but I can’t reschedule this.”

Yes, the employee messed up. But it’s not only and all her fault, just like it’s not all a student’s fault 100% if they don’t get a new concept.

And really, fault is not a helpful word here. A screw up is feedback. Feedback that something in they system isn’t working. It’s information.

In this case, management had also messed up. The employee hadn’t been properly or sufficiently trained. Reprimanding an employee and putting demerits in their personnel file is not managing. Not only is punitive and humiliating, it just doesn’t work.

People will mess up. That’s a given. Instead of looking for blame, look with curiosity. Why did it happen? And what can management do to support the employee so that this doesn’t happen again? What can we learn from this situation to improve our employee’s effectiveness AND our customers’ experience?

Don’t get me wrong, I’m not talking about coddling or never firing an employee. I am talking about accountability. Use the feedback to make the necessary tweeks, and hold everyone accountable: the employee AND the manager. Sometimes firing someone or reassigning them is the right thing to do.

Financial operations management is not all about number crunching and spreadsheets and financial ratios; it’s also about identifying those areas of your business that impact your clients and seeing if there are procedures in place that are not helping you retain your clients, or worse still, sending them away with nothing but bad things to say about you. Because money touches every part of your business, my job as a virtual CFO is to look at every part of the business and suggest improvements.

Ready to take a candid look at your business practices with an eye to doubling your profits? Schedule a free Financial Clarity Call with me and let’s see about getting this done for you.

To your financial peace of mind,
Monique

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What are CFO services exactly?

July 26, 2017 by Monique Lusse Leave a Comment

There’s a concept in yoga called “neti neti.” Neither this nor that.

Sometimes it’s helpful when you’re trying to figure out what something is to define first what it isn’t.

What are CFO services exactly? What is financial operations management? What exactly is it that you do Monique?

Here’s what I don’t do.

I’m not a bookkeeper. They keep the books. They track and record the day-to-day transactions in QuickBooks or Zero or some such accounting software. They make sure the bills get paid and the customers pay up. As a virtual CFO, I use the financial statements that bookkeepers produce to analyze past performance and provide assumptions for future planning.

I’m not a CPA (Certified Public Accountant) or an EA (Enrolled Agent). These folks are tax preparers and know how to produce income tax returns and to give tax advice. I shudder to think of the continuing education CPAs and EAs need to go through to stay on top of the IRS and its changing regulations. I work with tax professionals to structure the business to the owners best advantage.

I’m not a financial planner. Those folks are great for giving you advice on what to do with the money–that I help you make–that you want to invest for your retirement, kids college and such. I help the business owner make the money to invest in their future.

I’m not a business coach. They provides positive support, feedback and advice to improve personal effectiveness in the business setting, according to Wikipedia. I work with business coaches to help the business owner move forward.

I’m not a financial therapist. Bari Tessler, financial therapist par excellance says: “I describe this work as integrating deep psychotherapeutic training with practical skills, tools, and financial training.” I work with financial therapists to support the business owner put the insights they gain into practice.

If you think of all these different roles as being players in an orchestra, then I am the conductor. These different roles are all connected to each other and the business owner. If they aren’t overseen and synced, then the left hand doesn’t know what the right hand is doing. Some functions can get done twice and others not at all.

Financial operations management and CFO services makes sure that the books are being kept in a format that provides the owner with information on which to base decisions, and gives the tax preparer accurate information to file the tax returns and give advice. It means preparing budgets and forecasts and business plans. It means securing loans and line of equity from banks. It means helping struggling companies turn themselves around.

Money flows to every part of your business. Every part. And having a virtual CFO on your team ensures that the entire picture is being looked after. Seen and overseen and responded to.

If you feel like it’s impossible to hit the mark when it comes to your financial operations, then it’s time to make some changes. It’s not impossible, it just requires a thoughtful, customized approach. That’s where I come in.

Equity By Design offers you expertise equal to a full time CFO at a fraction of the cost. Let’s have a chat about how I can turn your business around, even out your cash flow, and double your profits. Guaranteed.

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What It Takes to Get Your Business “Investor Ready,” Part 2

July 19, 2017 by Monique Lusse Leave a Comment

Image: “Horse Show in Scotland” by Edward McCabe is licensed under CC BY 2.0

This episode is all about what investors are looking for.

Not banks or credit unions, that was last week, but investors.

And which type of investor you will be pitching your company to depends on your exit strategy.

If you’re looking to sell your company lock, stock and barrel, that’s one type of exit. This could be a sale to your kids because you want to keep the business in the family, to another company who wants to expand their market share, or to an individual who wants to buy a mature, proven business.

If you’re looking to “go public” in an IPO (initial public offering), that’s another. This is where angel investors and venture capitalists come in. These guys, and they are mostly guys, are accredited investors–high rollers looking to gamble and win big.

And if you’re not looking to go public but want long-term investors to grow, that’s yet another. DPOs, or direct public offerings, involve unaccredited investors who are aligned with the mission of the company, kinda like crowdfunding but different.

The good news is that no matter what type of investor you’re engaging with, or what your exit strategy, as I mentioned in last week’s post, getting “investor ready” involves the same elements:

Good financial records.
Complete business plan.
Financial projections.
Solid management team.

Whether you are pitching to an angel, a VC, a family member, or a buyer, it pays to know what all they are looking for. Because different types of investors are focused on different aspects. The bank is interested in past performance and collateral. An investor is interested in the future and who you are: the jockey, not the horse. Both are interested in past and future; however, each places their emphasis on different parts of the picture.

Your CFO can prepare the information they want in the way they expect to see it. Investors want to see the numbers, and they want to see how you are going to reach those numbers. They want to see how they are going to get a big return on their money. And it gives investors comfort to know that you are working with a financial professional; it demonstrates to them that you know enough of what you don’t know to get the right support.

They want to see your financial history, so this means you have to have up-t0-date financial records.

They want to see your written plan on how you expect to get where you want to go, so this means you have to have a business plan that details every aspect of how you run your company: marketing, management team, financial projections, and production.

No matter what your exit strategy, working with a CFO is essential to your business health and growth. What to know more about how CFO services might help your business? Take the first step and schedule a time to talk with me about how I can help you get your business “investor ready.”

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What It Takes to Get Your Business “Investor Ready,” Part 1

July 12, 2017 by Monique Lusse Leave a Comment

I’m guessing that if you’re interested in getting your company “investor ready” it’s because you are looking for outside cash.

There are many reasons a viable company needs outside cash:

You need to purchase equipment to expand your business.
Your business is profitable, but you need to even out periodic negative cash flow.
You want to sell the company.
You want to attract top-notch key employees.
You’re a start up and need to raise capital.

While these reasons are different, they all have one thing in common: your company needs something from the outside. It’s your job, with the help of your CFO, to provide those potential sources of cash with the information they need in the way that they want it. You have to show them that you know what you’re doing. It helps to talk their language.

What you need to have in place to call yourself “investor ready:”

a solid finance and accounting team
1. full charge bookkeeper to handle the day-to-day operations and record-keeping in a complete, accurate and timely way
2. a tax preparer (CPA or EA) to file accurate tax returns in a timely fashion and to give you tax advice
3. a CFO to oversee all the financial operations and coordinate between the bookkeeper, the CPA/EA, you, and the bank or investors
documented business processes in the form of an Operations Manual
1. job descriptions
2. processes
3. procedures
a solid accounting system
1. pick a system you can grow into so that you have your financial and accounting history in one system.
a vision for the future, i.e., business plan
1. Marketing plan
2. Financial projections
income and payroll taxes filed on time
current, complete, and accurate financial reports
key management positions filled with experienced people, either as staff or consultants.

In fact, these best practices apply to all businesses, no matter what their exit strategy, how long they’ve been in business, or how many employees they have. However, not all business put in the effort to put these in place. That’s why some businesses fail in the first five years, some struggle, and some fail to thrive. But if your business wants to grow and needs cash from an external source, then these are essential for success.

There are two ways to get the cash you need to scale your business: debt or equity.

Debt financing: This is about borrowing money and repaying it with interest.

Equity financing: This is about selling shares of your business, thereby cutting investors in on the ownership of the business, and sharing the profits.

There are pros and cons to each. What it all comes down to is what’s the best deal you can negotiate at the time you need the money and with whom. As the fabulous Annie Savoy said in Bull Durham, “…it’s all a question of quantum physics, molecular attraction, and timin’.”

Types of investors:

Friends & family
Partners
Banks and credit unions
Angel investors & venture capitalists
Philanthropic foundations
Community investment funds
Accelerators & incubators

Let’s talk here about #3, banks and credit unions. I’ll cover the others later in other posts.

Banks, where your debt financing will come from, are more risk-averse than investors. And they rely more on your history of past performance and what assets you have to put up as collateral. This is also cheaper money than compared with what you’d get from an angel or VC; those types of investors want an ownership interest and a large return on their money. This is a good solution when you have collateral and a profitable business.

Banks want collateral up the wazoo. And if you don’t have collateral in the business, like equipment or real estate, they want a personal guarantee from the owner(s) using their personal assets, like the house.

Banks and credit unions are the best source of cash when you have collateral. Investors serve a different purpose and I’ll talk about them next week.

What your CFO does is provide the financial information the bank needs in the format the bank wants it in. For starters, they will want to see your tax returns and financial statements for the prior 2-3 years, budget and cash flow projections for the next 2-3 years, and a bunch of other supporting data (previous job history, personal assets, spouse’s income and assets, etc.)

In order for you to provide them with your tax returns, you have to have filed them, which means you have to have prepared them, which means you have to have an accounting system in place and a bookkeeper to have tracked the data. Your CFO is the best person to coordinate and direct this process.

When you’re looking to get your business “investor ready” I can help. Got questions? Pop ’em into the comments below and we’ll get ‘her done! And remember: there are no stupid questions. Never.

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Let’s Talk Cash Flow, Part 2

July 5, 2017 by Monique Lusse Leave a Comment

You’ll never find a company with positive cash flow and profitability in bankruptcy court.

Just won’t happen.

Let’s start with profitability. Whatever it is that you are selling, you have to be selling it for a/ more than what it costs to make and b/ more than what your overhead is. In other words, you have to have a bottom line that is in the black.

If you don’t, then that’s the first thing to fix by some combination of:

raising your prices
lowering your costs
increasing your sales volume.

There are two major break points in your business model: the gross profit (your sales minus your costs of goods) and the net profit (the gross profit minus the overhead expenses.)

The gross profit has to be in the black, otherwise you’re not in business but running a charity. And your gross profit has to be enough to cover your overhead expenses to get you to a net profit that also has to be in the black.

So say you are profitable, but you find yourself in a negative cash flow situation from time to time. Let’s look at some possible reasons for this happening and what the fixes are:

You manufacture a product or provide a service that require costs that you have to cover before you get paid by your customers.
- This is the easiest fix of all. Get some financing from a bank or from investors. More on what all you need to get “investor ready” in next week’s blog post.

You have customers that are slow payers, so you’re making the sales, but the cash is slow in coming in.
- get deposits from your customers
- get serious about collections.

You have a seasonal business and most of your cash comes in all at once.
- set aside a reserve account to carry you over the dry months.
- defer expenses and capital expenditures into months more flush with cash.

You show a profit on paper, on your Profit & Loss, but you’re making lease payments on equipment or financing a line of credit.
- this is a marketing fix…you just have to get more sales volume, either more customers or sell more to the customers you have.

When it comes to maintaining a sustainable business, there are two things you need to have in place: profitability and cash flow.

When you’re wanting to increase your profits and balance out your cash flow, I can help you get there. It’s just a question of honing in on the particular area specific to your situation and applying the appropriate remedy.

Would love to hear about your current challenges in the comments below.

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Let’s Talk Cash Flow: What It Is and What It Isn’t

June 28, 2017 by Monique Lusse Leave a Comment

Cash flow is the top metric to track, bar none.

As my financial management teacher in B-School would drill into us mission-driven social entrepreneurs, “If you don’t have a viable business, it doesn’t matter how much good you want to do in the world; you’ve got to be sustainable.” And the fastest way to unsustainable is to run out of cash.

What’s the best way to track your cash?

Why an Excel spreadsheet, of course. I can count on one hand the number of times an Excel spreadsheet is a good idea and this is one of them.

What you’re tracking is the timing of cash coming in and going out.

Here’s how to create a cash flow projection:

Make a list in column A of all your expected receipts and in column B put the date of the month that will fall on.
Order this list by the date of the expected receipt or transaction.
Make columns for each month for the next twelve months. The amount goes into the appropriate month.
Start this list with your the balance as shown in your check register.

Here’s what I’m talking about:

	due date	Jun-17	Jul-17	Aug-17
book balance as of:	6/27	7,607.51	7,516.51	10,566.51
office rent	1st		(150.00)	(150.00)
AR – PAFM	5th		500.00
AR – TTM	10th		4,500.00
Owner Draw	15th		(1,500.00)	(1,500.00)
AR – GDM	25th			4,500.00
AmEx 3000	28th	(91.00)	(300.00)	(7,000.00)
		7,516.51	10,566.51	6,416.51

A couple of things I want point out:

The “book balance” in the balance in your check register. It is NOT the cash balance in your bank account as shown by the bank on their website. The book balance is critical to get right here because the cash flow projection is all about timing.

Because this is about actual cash going out, whatever you charge on your credit card does not get listed on the cash flow. Only the amount that you are going to pay on your credit card goes on the cash flow. My AmEx earns miles on Delta, so I charge whatever I can onto that card. That’s why in this example you don’t see my cell phone or restaurant charges and such.

Why maintain a cash flow?

Cash flow is all about two things: when the cash comes in and out, and how much cash goes in and out of your checking account. That’s it. Projecting out your future cash flows will expose exactly when you might run into a negative cash position. Let’s take a look at the same example, with one difference: the beginning book balance.

	due date	Jun-17	Jul-17	Aug-17
book balance as of:	6/27	495.01	404.01	3,454.01
office rent	1st		(150.00)	(150.00)
AR – PAFM	5th		500.00
AR – TTM	10th		4,500.00
Owner Draw	15th		(1,500.00)	(1,500.00)
AR – GDM	25th			4,500.00
AmEx 3000	28th	(91.00)	(300.00)	(7,000.00)
		404.01	3,454.01	-695.99

Given this scenario, you can clearly see that I’ll run out of cash at the end of August. So something’s got to change. And I have a few options. I can decrease my Owner Draw, or I can reduce my AmEx payment in August, or I can bring in more sales, or any combination thereof.

There are three reasons why you might find your business in a negative cash position: timing, volume, or unprofitable business model.

If it’s a timing thing, you have lots of control over when you incur expenses and when you pay them. For example, Paul runs a Christmas tree farm and, as you would expect, all his sales come in December of the year. He brings in a net operating profit for the entire year, so he looks great on paper, it’s just that cash comes in all at once. So he keeps enough in reserve to tide him over from January through November and a cash flow projection helps him do that.

If it’s a volume thing, you just need to bring in more sales to cover your costs. Easier said than done, but it’s a pretty straightforward marketing problem.

If it’s a profitability thing, that’s a bit more serious. It means that no matter how you futz with the timing, you’ll run out of cash eventually. It means that your costs are more than what you bring in on each thing that you sell. That’s when a turnaround is in order because the business model needs to be changed so that your product or service is profitable #1, and that you have the volume needed to throw off enough profit to be a sustainable business #2.

Cash flow projection vs. Statement of Cash Flows:

These are NOT the same thing by any stretch. A cash flow projection is created and maintained outside of your QuickBooks accounting software on an Excel spreadsheet and is all about timing and amounts of FUTURE cash inflows and outflows.

A Statement of Cash Flows is generated inside of your QuickBooks and is about the PAST sources and uses of cash. This is a report that you most likely will very rarely use unless you deal with outside investors and debt. Then this is an important analysis tool to see where your money comes from (revenue or debt) and where it goes (operations or financing the debt.)

Want some help constructing a cash flow projection for your business? Hit me up with your specific questions in the comments below and let’s get you going.

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The Big Picture Perspective on Running The Money Side of Your Small Business

June 21, 2017 by Monique Lusse Leave a Comment

June, a recent client, told me that she wasn’t sure that she was doing things right when it came to the financial side of her business. When I first told her what I did for small business owners, help them get more profitable through accounting and finance, her eyes glazed over. Here’s exactly what she said to me, “I don’t know what I don’t know. Numbers scare the shit out of me.”

But here’s the thing, she already knew A LOT! She knew that there were things about financial operations and management that she really needed to know in order to grow her business profitably, and that she wanted to know what those things were, then understand them.

So here’s how I broke it down for her.

Think of your financial operations as a pie divided into three slices, like this:

photo by Monique Lusse, 2017

Anything you do in your business falls into one of those three categories: strategy, execution, analysis. Of course, each has sub-categories, and they have sub-categories, and those are covered in other posts; for right now, let’s just think about the meta view.

Here they are defined:

Strategy – how to think about what you want to do. This is about your ideas; it’s where you do research, examine your options, then pick one.

Execution – how to do what you strategized about doing. This is about hands-on implementation of that one option, making the idea a reality.

Analysis – how to interpret the results of the execution of the strategy. This is where you crunch the numbers and turn the data into information.

And then you do it over again in another round based on output from the first round. That’s right: rinse and repeat. The cycle never ends as long as you’re in business. It’s a constant iterative process.

When I laid out these three concepts to June, she let out a deep breath and smiled. “Oh, that’s so simple. I get that. I thought it would be much more complicated and I’d need an MBA to understand it.” she said. “It’s not so scary after all.”

Remember, anything you do in your business is either strategizing, executing, or analyzing. The trick is to do them in sequence. Strategize first, then execute, then analyze. And depending on the project at hand, this process can take 10 minutes, 10 hours, or 10 months.

Let me ask you…what area are you stuck in or confused about right now in your business? Ask me in the comment section below and I’ll be happy to unpack it for you.

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To Expense or To Capitalize…That Is The Question.

June 14, 2017 by Monique Lusse Leave a Comment

How do you account for those large equipment purchases, like a desktop computer or a laptop? Do you expense it (take the full deduction now?) Or do you capitalize it (carry it as an asset on your books and depreciate it over time?)

It’s not a straightforward as you might think. There are rules about this and it behooves you to know what they are.

Two rules about rules:

• Rules are meant to be broken.

• There’s an exception to every rule.

The second certainly applies when it comes to the IRS. You don’t want to knowingly break a rule. That’s not creative accounting, that’s fraud…which will get you free room and board courtesy of the federal government

Making a mistake is OK; you’ll get slapped with penalties and interest and you can sleep in your own bed. The information herein will help you stay on the straight and narrow.

Just a brief caveat before we start: what follows here applies to physical things only, things that are “tangible,” things that you can touch. Different rules apply for “intangibles,” which most small businesses don’t need to concern themselves with. Stuff like “intellectual property” or “goodwill.”

RULE #1: If the tangible item has a “useful life” of more than one year, then you have to “capitalize” and “depreciate” it. And the IRS determines what that useful life is.

• Example: a laptop computer has a useful life of 5 years and you must depreciate it over that period of time. You have your choice of depreciation method (straight-line, accelerated, sum-of-year, double-declining-balance,) but you still have to depreciate it over 5 years.

o Exception #1: IRS Section 179 — which came about as the result of the Economic Stimulus Act of 2008 in order to incentivize business to purchase new equipment and software, thereby stimulating the economy (or so the theory goes) allows you to take the full deduction of new equipment and software (up to $500,000 per year) in the year you purchase it.

o Exception #2: if the item has a value of less than $500, most accountants will expense it because the cost of tracking that asset over its useful life is just too burdensome, time consuming and costly. And the IRS agrees with that. So an external hard drive would last more than a year (hopefully) but cost less than $500, so it’s just worth everybody’s time to expense that puppy.

RULE #2: If a tangible item is going to be used up within the next twelve months, then you can “expense” it. These types of expenses are called “consumables.” Paper clips, copy paper, pens.

While Section 179 is available, it doesn’t mean that you have to take it. Why would some companies not avail themselves of this tax advantage? Because it decreases their bottom line, their net operating income, their profit. And there are lots of reasons why a company would want to show more rather than less profit, like trying to qualify for a loan or a line of credit, for example.

So there you have the basic rule of thumb about when you can expense a purchase and when you have to capitalize and depreciate it.

Hope that helps. Please let me know if you have any questions about this by hitting me up in the comments below.

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Is Your Bookkeeper Stealing From You?

June 7, 2017 by Monique Lusse Leave a Comment

Embezzlement.

And ugly word for an ugly thing.

It’s what happens when someone you trust steals money from you. Like your bookkeeper.

“How could they do this?” you wonder. “Why would they do this?

Two really good questions.

The “how” is pretty straightforward: there are inadequate controls put in place in your company’s operating procedure. The solution is equally straightforward: put controls in place; have checks and balances, such as:

Control #1: When cash is involved, have two people count it.

Control #2: Separate duties. One person records stuff into QuickBooks (or Zero or FreshBooks) and another person reconciles the bank and credit card bank statements.

I used to work for a temp agency back in the day and one of my assignments was to fill in for the Accounting Manager of a non-profit who had been fired after having been escorted off the premises in handcuffs.

Seems her past caught up with her. She had embezzled money from the previous non-profit she had worked for. I was brought in to audit the books and see what, if anything, she might have stolen from her current employer.

Turns out it was plenty.

The non-profit held a fundraiser every year and that event generated quite a bit of cash. She skimmed some off the top and no one was wiser because, and here’s mistake #1, she was the only person to count the cash. What should have happened is that two people should have counted the cash, each acting as a check for the other. (If they were both crooks and conspired to steal together, that’s another story.)

The agency was small. It had an annual budget of just over $1MM. As is usual in small companies and non-profits of this size, she was the accounting department. That meant she did all the bookkeeping from soup to nuts. We don’t really know exactly how much cash she skimmed, because we don’t know how much was brought in. It’s only because she admitted doing it that we know for sure that it happened at all.

In addition, she had a company credit which she used to purchase personal items for herself. Not extra tchotchkes for the office but airline tickets, clothes and shoes. Thousands of dollars. And she was able to do this because of mistake #2: she not only recorded the credit card transactions in QuickBooks, she reconciled the bank and credit card statements. This allowed her to falsify entries and record her personal groceries as “Office Supplies.” She buried her charges in plain sight.

The “why” runs the gamut. Everybody who does it has a good (to them) reason. But it boils down to either rage or desperation.

Some people are angry at their boss because they were passed over for a promotion or a raise.

Some people’s personal circumstance take a dramatic turn for the worse; a child gets really sick and their insurance doesn’t cover enough.

Some people think they are underpaid and they are just making up the difference, taking what they deserve.

Some people would never have taken the money if proper controls had been in place. Those people succumb to temptation; they do it because it’s easy to do.

Some people start off by “borrowing” the money, fully intending to “pay it back.”

Think that embezzlement can’t happen to you? Think again. It can.

Don’t want your bookkeeper to think that you don’t trust them? Get over it! Honest bookkeepers want controls. Controls protect them and they want the assurance that if someone else does something, they won’t be falsely accused.

Putting controls in place provides a very real service to your employees. It removes temptation for those that might be tempted should they fall on hard times. It helps them be their best selves. A boss of mine taught me that years ago. Thanks Phil. I’ve never forgotten it.

Put checks and balances into place. It’s the right thing to do.

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