QuickBooks Online Banking Error Code: OL-222

Are you experiencing issues while importing Capital One credit card transactions via a .QBO file into a QuickBooks desktop file? You are not alone – and you no longer need to worry. We have seen this error recently as well. In response, we’ve developed a solution to circumvent the error message until the issue is completely resolved.

OL-222 Error Message Appearance:

The message usually populates in a notification box similar to the one pictured below. If your message looks slightly different from the image, look for the specific error code to confirm your issue; in this case, OL-222.

OL-222 Error Message Underlying Issue:

The error message results from a coding problem that Capital One is aware of. Capital One is currently working with Intuit to resolve the issue. Until then, however, the following steps serve as a guide to circumvent the error message.

OL-222 Error Message Resolution:

  1. Download the .QBO file from Capital One
  2. Before importing, right-click and open the file via Notepad
  3. Perform a search and replace for the following:<TRNTYPE>D</TRNTYPE> – replace with <TRNTYPE>DEBIT</TRNTYPE> <TRNTYPE>C</TRNTYPE> – replace with <TRNTYPE>CREDIT</TRNTYPE>

Once each step is complete, you should be able to import the .QBO file into QuickBooks. However, if the error pursues, do not hesitate to contact our team of financial futurists.

Klein Hall: Accounting Firm of the Future

Klein Hall is the full-service accounting and business advisory firm of the future. Among other strategies, we utilize QuickBooks as a helpful industry tool. We provide opportunities for our clients that combat the challenges of today’s financial universe – while proactively anticipating the challenges of tomorrow. We work alongside a variety of industries, including not-for-profit, schools, manufacturing, distribution, medical, and governmental. We can work alongside you as well. Contact us today with any further inquiries – or to start a conversation about futuristic financial leadership for you.

How Can Not-For-Profit Financial Consulting Help Your Organization?

Not-for-profit organizations are swamped with financial obligations, from navigating often-altered government policies and managing cash flow to meeting compliance standards and so much more… not to mention the daily necessities of running a business.

When time is spent managing financial stressors and planning for the future, time is lost for the nitty-gritty details of hour-to-hour management, marketing, brainstorming fundraising opportunities, navigating volunteers, etc. Or, hourly management is taken care of and any semblance of fiscal strategy is forgotten. Some not-for-profits can balance these needs and stay afloat. However, considering the ways that financial consulting can help your organization is important, because “staying afloat” is not enough to successfully navigate the financial future.

Identify Financial Vision

The future of the not-for-profit industry is here. A financial vision is necessary for staying ahead, gaining a competitive edge, and establishing fiscal strength. Not-for-profit financial consulting can save your organization time and resources by eliminating wasted opportunity. Working with a firm that holds similar values can be invaluable for advancing the goals of the nonprofit.

Develop + Organize Performance Measures

Cohesive, clear reporting is important. An excellent, forward-looking financial consultant will develop new performance measures based on your not-for-profit goals, then organize those performance measures into clear reports that accurately display how your organization is performing.

Review + Revise Internal Systems

Financial consultants should constantly augment internal systems to consistently add greater value to your process. Your day-to-day operations can always be strengthened and improved. Allow a professional team of consultants to guide you through that process, supporting you year-round with internal control analysis, financial statement audits, and audits under OMB Uniform Grant Guidance.

Train, Support + Implement Accounting Software

Your not-for-profit financial consultants are the experts, but that doesn’t mean you are helpless. A great agency will train your organization to utilize the best accounting software. Klein Hall, an accounting firm of the future, integrates and supports Intacct.

Intacct is a cloud-based system, ideal for collaboration among your entire team. Created for small to medium-size businesses, Intacct automates many processes, freeing you and your team to focus on daily goals and tasks. Intacct is flexible, able to adapt to an organization’s specific needs. Klein Hall also values support through training via QuickBooks. Klein Hall trains each organization with customer data, once more targeting the specific needs of the charity. Training to use QuickBooks includes the study of reconciling accounts, printing estimates and invoices, tracking accounts receivables and invoicing, running profit and loss reports, and so much more. The goal is to help you get on track and stay there.

Klein Hall: The Accounting Firm of the Future

Klein Hall is not your typical accounting firm. Klein Hall is a team of client-oriented individuals, driven towards the future, dedicated to excellence. We love working with not-for-profit organizations, walking alongside charities to help accomplish their goals by taking care of their financial livelihood. To get in touch, call us at 630-898-5578 or shoot us a message.

Uncover and Prevent Fraud with Forensic Accounting Services

Did you know that the average company loses 5% of its revenue to fraud every year? Small businesses suffer even greater losses. Are you aware that fraud prevention tactics of the past are losing efficacy as cybercriminals exploit technological advances? Revolutionary forensic accounting services – able to study the future and prevent fraud before it happens – are becoming an invaluable resource. The following content explores the intricacies of business fraud and forensic accounting, as well as the ways both have developed. Ultimately, the goal is to present the necessity of forensic accounting services in the fraudulent world we live in.

The Problem of Business Fraud

Businesses are fully aware of the dangers of fraud, as well as its unmistakable prevalence in nearly every industry. Do not assume that your company is exempt. Fraud is so rampant that if it has not impacted your business yet, it likely will without preventative measures. Businesses are also noticing a rise in fraudulent activity. In fact, when businesses were asked if they have detected more or less fraud in the past year, nearly 40% said more.

While most businesses are fully, painfully aware of the pervasiveness of fraud, many are unsure how to combat it, feeling vulnerable and unable to protect their company or patrons. On one hand, as businesses have attempted to combat fraud, fraud itself begins differentiating to a variety of new methods, from check fraud to corporate card fraud to the next technological advancement.

On the other hand, many companies prioritize customer satisfaction over security, simply accepting loss for the sake of happy customers. A 2018 global fraud report states: “Businesses are forever grappling with the tension between managing fraud and maintaining a positive customer experience. In most cases, the latter wins out, as evidenced by their willingness to accept higher fraud losses from authentication protocols that they concede might be deficient, but do not disrupt the user experience.”

The Fight Against Business Fraud

In the midst of this battle between customer satisfaction and security, most businesses have utilized security measures that have been used for years, such as security questions, usernames, PIN codes, and passwords. Simultaneously, however, companies are learning that these methods of security are not always the best options. According to the same fraud report referenced earlier, nearly a quarter of consumers forget either a password or username within half a year. Ultimately, forgetfulness makes passwords and usernames a source of frustration to the average consumer.

Leading the way into new, more secure authentication methods requires a shift from the status quo, a huge, uncomfortable step for most businesses, unless many industries dive in at once. Yet, nearly 75% of businesses claimed that they “would be very interested in more advanced security measures and authentication.” The need is great. The desire is there. Yet, proactive steps to prevent fraud are widely ignored.

The Basics of Forensic Accounting

Not something to be ignored, however, fraud must by uncovered and prevented with a trustworthy, cutting-edge forensic accounting service.

What is forensic accounting and how can it solve the problem of fraud? Investopedia defines forensic accounting as a practice that “utilizes accounting, auditing and investigative skills to conduct an examination into the finances of an individual business. Forensic accounting provides an accounting analysis suitable to be used in legal proceedings.” Forensic accountants are carefully trained to preemptively notice fraud, often preparing a case that serves as evidence in a court of law. Forensic accountants must be able to investigate a company’s financial statements and transactions, comprehend the information, and – ultimately –check for suspicious activity.

Forensic Accounting: A Brief History

Interestingly, forensic accountants are not only responsible for fraud prevention; this is a more recent role development. “Like any other job,” honors student Kristin Dreyer wrote, “Forensic Accounting has evolved with time. The industry has been affected by changes in technology, society, and the economy. As one aspect of the world changes so has the job of a Forensic Accountant. Continuing education is only one way in which Forensic Accountants learn how to adjust to new challenges. The profession has been around since the early 1900’s and has greatly altered the way fraud is discovered and handled since then.”

For years, forensic accountants have been utilized after natural disasters, divorce cases, or famous criminal proceedings. The capture of Al Capone is an example of a famous case featuring forensic accountants. The accountants noticed a large amount of illegal income, such as gambling, that was not claimed on his taxes. Tax evasion, oddly enough, was the crime that ended Al Capone’s reign. The heroes: forensic accountants.

The Future of Forensic Accounting

Recently, as the prevalence of fraud has increased and changed with the times, forensic accounting services have been prompted to revolutionize and think proactively.

In the world of forensic accounting today, certain accounting firms have looked to the future, determined to stop fraud before it happens. This is the kind of forensic accounting service you should pursue for your businesses. Pay close attention to offered services, those that will eventually merge to create a proactive fraud strategy. These include assessment of vulnerabilities, mitigation of potential risk of loss, litigation support to re-coop losses, and determination of fraud risk tolerance.

Fight Fraud with Forensic Accounting Services

Furthermore, in an ever-changing world, traditional fraud prevention techniques are losing. Passive, reactive accountant services simply will not cut it anymore. Cybercriminals are pervasive, utilizing technology to always be one step ahead. As a result, inhibiting fraudulent activity requires forward-thinking, proactive prevention.

Klein Hall is a full-service accounting and business advisory firm of the future. We know the frightening prevalence of fraud, and we know that internal control weakness is the reason for nearly half of all cases. This is why we look for systematic vulnerabilities throughout your business. Our fraud prevention services are designed to stop financial crime before it happens.

Fraudulent activity can happen to the very best of businesses. Don’t wait until it strikes. Contact us today to begin a discussion about a future free of fraudulent activity for your business.

Why a Good Idea Is Sure to Fail Without a Start Up Business Plan

Brilliant ideas strike at the strangest times. Usually, they are forgotten. Every so often, they are remembered and scribbled down or shouted to Alexa. Occasionally, the idea is carried out. However, a great concept alone is not enough for success. Even the most striking and unique business ideas fail without a start up business plan. Begin with the idea, design a plan, and follow through. This article will walk you through how to develop a business plan that can transform your good idea into an actionable business start-up.

What is a Business Plan?

A business plan is a description of your business’s future goals, short and long term. Your business plan clearly outlines your business’s envisioned trajectory. As you write, don’t get bogged down with details, but don’t over-simplify. Your plan should include the specific steps you’ll follow to achieve your objectives.

How to Write a start up business plan

Define your objectives. Designing a business plan begins here. Investors are looking for evidence that your business will be profitable, and this starts with a compelling, concise summary of your mission. What makes your company unique? What is your goal? Who do you hope to influence? Who will benefit from your idea? Is there a market problem your business solves?

Analyze your market. Understanding your target market through careful research is crucial to startup success. Fully comprehend the needs your business will fulfill. Who is your target audience? Where do they live? Which socioeconomic statuses will be able to afford your product? Once you’ve identified your target market, you can recognize and analyze your primary competition. Know who you will be challenging and strive to understand their strategy.

Understand startup costs. Business startups require capital, often more than expected. Consider your cash flow realistically, and briefly summarize your projected financial standings for the first few months of business. An accurate, innovative financial plan is crucial to startup and continued growth, and if you do not feel qualified to tackle the challenge alone, find an excellent consultant to lead your financial ambitions.

Create a product/ services list. Identify what you’ll be providing, what advantages you possess over industry competitors, and what value you provide to potential customers. As you compile a comprehensive portfolio, consider how you might expand your products or service. Consider also how you may market these items to your industry.

Design a management plan. How will your business function daily? What will operations look like? Define specific responsibilities and how these will be distributed among the company.

Evaluate marketing channels. Determine the best marketing channels for your company and define a marketing budget. Then, design a logo and color scheme. Choose which social media networks you’ll pursue, if any. Decide on business cards, a website, etc. This step is important, because it defines how you’ll be seen by the public and how you’ll get your brilliant idea into their hands.

Consult with a financial futurist at Klein hall

Today’s financial universe is difficult, often impossibly challenging for young and growing businesses. Klein Hall is an accounting and business advisory firm of the future. We are dedicated to leading businesses through today’s financial waters into the opportunities of tomorrow. Contact us today to begin a conversation.

Small Business Accounting Can Be the Difference Between Success and Failure

If you own a small business and are only using an accountant to prepare your taxes – or aren’t using an accountant at all – you might be missing out on the key component that can allow your business to truly thrive.

An accountant can help at all stages of your company’s growth, from the creation of a business plan to incorporation to expansion. Below we’ll discuss how quality accounting can propel your business to success, as well as some of the potential pitfalls you may be risking by failing to take full advantage of small business accounting services.

Business Formation

Some million- and billion-dollar startups are a thing of legend: formed in a garage with a shoestring budget and no business plan. But for the vast majority of businesses, this fly-by-the-seat-of-the-pants approach will lead to an early and uneventful failure.

Having an accountant on board during the creation of a business plan can ensure that your business is set up in a way that provides the best growth opportunities. Deciding between an S Corp, C Corp, LLC, LLP, or another business structure can be tricky, and with the advent of the Tax Cuts and Jobs Act in late 2017, there are more tax advantages available for small businesses than there have been in decades. For example, business owners who receive pass-through income from an S Corp can take an additional 20 percent deduction on this income.

An accountant can work with you to determine which business structure makes the most sense and can catapult you to profitability quickly. And although accountants aren’t lawyers, they also provide some expertise when it comes to choosing a way to shelter or separate your personal assets from your business ones.

Setting Up the Books

Once your business has started bringing in some income (and making expenditures), it can be easy to get lost in the flurry of activity. Before you know it, you may be having trouble determining just who owes what. Even if you don’t employ an accountant full-time, involving one in this setup process can help you get a workable system in place to track transactions in real time. Not only will this make it easier to keep a handle on your cash flow, but it can also make it much easier (and less expensive) to prepare your business taxes.

Forecasting

After you have a solid accounting system in place, an accountant can help you measure a wide range of business metrics. Simply knowing that you’re making money isn’t enough—you need to know how much money, where it’s going, and how your expenses are tracking business income over time.

An accountant can help you crunch this data to make forecasting decisions: hiring new employees, adding a 401(k) or profit-sharing plan, or taking other steps that can add costs in the interim but set you up for future growth

Delegating Financial Affairs

As every business owner knows, running a business is a 24/7/365 job. With the variety of pressing decisions that can face you on a daily basis, delegating accounting tasks like payroll, tax preparation, and other financial affairs can free up a major chunk of your time to focus on more big-picture issues.

If you’re ready to delegate some of your small business accounting tasks or just want some help setting up a business plan, the experienced accountants at Klein Hall CPAs can help. As a full-service CPA firm, we provide a wide range of services to businesses, governments, not-for-profits, and more. Contact us today to learn more about what we can offer your business.

Does the Cost-Effectiveness of an Outsourced CFO Outweigh Other Factors?

Over the last decade, some of the biggest household names in the U.S.—from Circuit City to Toys ‘R Us—have shuttered their doors for good, liquidating company assets in the face of bankruptcy. At the heart of each of these riches-to-rags stories lie some serious financial and marketing missteps that could perhaps have been avoided through prudent long-range planning. 

Smaller companies with fewer zeroes on their balance sheets may not feel their business merits a full-time chief financial officer or CFO. But for these burgeoning businesses, it’s even more important to make smart decisions that will help your business remain sustainable through adverse conditions. A CFO, either in-house or outsourced, can help.

Read on for some of the factors you’ll want to consider when balancing the pros and cons of outsourcing your company’s CFO needs. 

Your CFO’s Responsibilities

Regardless of whether you retain an in-house CFO or ultimately decide to outsource these duties, it’s important to have clear guidelines and expectations for your CFO before you fill this role. Some of the duties for which CFOs are typically responsible include:

  • Heading up the finance and accounting teams;
  • Tracking the business’s overall cash flow;
  • Overseeing the business’s capital structure and determining how to finance new ventures;
  • Forecasting—namely predicting future cash flow, assessing profitability, and deciding when to pull the trigger on upcoming major expenses;
  • Collecting, presenting, and reporting key financial data to shareholders, directors, and other stakeholders; and
  • Handling taxation issues, including both practical matters (like making sure quarterly taxes are timely remitted) and long-range planning (like making sure the business is structuring its purchases and capital improvements in the most tax-efficient manner).

In addition to these, depending on the size and scope of your business, you might also consider making your CFO responsible for:

  • Reviewing and revising your company’s financial, tech-security, and HR policies; and
  • Engaging in outreach to drum up new financial opportunities (whether lending, marketing, or something else entirely).

The scope of your CFO’s duties (and the amount of time you expect these duties to consume) may be one of the weightiest factors in your decision whether to hire an outside CFO. For example, if an internal review indicates that these responsibilities will take someone an average of 10 hours a week to complete, paying a full-time salary (and benefits) to that person may not be the most economical option.

On the other end of the spectrum, a company whose CFO duties will require more than 80 hours of work per week may also want to consider outsourcing, as it could be tough to find a single person to effectively and reliably handle this volume of work over the long term.

Cost Considerations

Because of the skills and knowledge a CFO must possess in order to do their job well, it’s almost always more cost-effective to outsource these duties by hiring a “virtual CFO” than it is to maintain a CFO in-house.

Putting together a top-notch benefits package that is sure to attract qualified candidates can run into the mid-to-high five figures on its own, even before accounting for a C-suite salary. Meanwhile, having a virtual or outsourced CFO allows you to analyze each of the tasks you’d like your CFO to complete, then negotiate a payment “package” that ensures you’re getting the most value for your money. If your needs change, you can always revisit this package to add or remove certain tasks; a far easier process than hiring or terminating a full-time employee.

However, it’s important to caution against the most penny-wise, pound-foolish option out there: eliminating the CFO role entirely. In the early days of a business, it’s common—even essential—for the company’s founders and leaders to take a jack-of-all-trades approach to the business’s needs. But as your business grows, it needs someone whose role is exclusively dedicated to the financial stewardship of business assets. Failing to bring a CFO (or virtual CFO) onboard during your business’s growing years can lead to stagnation and loss of market share.

Flexibility And Accessibility

Another area in which virtual CFO services tend to outrank more traditional arrangements is flexibility. Virtual CFO services are easily scalable, allowing you to accelerate or back away whenever your business’s needs change.

If you haven’t had much in the way of financial management or planning during your startup days and want someone to provide you with a holistic overview and some targeted suggestions, hiring a virtual CFO to generate a long-term plan (and then to revisit it every few years) can be a lucrative investment. Klein Hall offers virtual CFO services to businesses, governments, not-for-profits, and individuals in the Chicagoland area.

A virtual CFO can also help you during times of transition, like an initial public offering or a merger or business acquisition.

Inside Knowledge of Your Business

Many business owners are hesitant at the thought of a virtual CFO because it’s understandably hard to imagine that anyone who isn’t part of your business can adequately advise you on how to run it. Does the cost-effectiveness of an outsourced CFO outweigh their lack of in-office expertise?

For most companies, the answer is yes. An outsourced CFO may not be intimately familiar with the inner workings of your business, but such a depth of knowledge isn’t usually necessary in order for your CFO to provide you with valid (and valuable) advice. Most outsourced CFOs have experience with multiple businesses spanning multiple industries, giving them the expertise to objectively evaluate your company.

In contrast, an internal CFO can sometimes be more vulnerable to “yes-man” syndrome in an effort to get along with coworkers or avoid being the bearer of bad news. This confluence of considerations can often make an outside hire the best possible option.

If you’re interested in learning more about the advantages and potential drawbacks of enlisting the help of a virtual CFO or want to get started with your own CFO, get in touch with us today! At Klein Hall, our full-service accounting and financial management firm boasts experienced advisory services, including virtual CFOs, who can review your business’s financials and set you on a course of long-term sustainability.

How a Business Advisor Can Accelerate Your Business Growth

When it comes to launching a successful career in any industry, the first piece of advice fresh hires receive is often to “get a mentor.” These mentors can play an invaluable role in helping you navigate a new workplace, new goals, and new expectations.

But once you’ve left the rat race to launch your own business, the value of a mentor can pale in comparison to that of a business advisor—someone who is intimately familiar with your specific industry and who can provide you with balanced and impartial advice for the challenges you face. Rather than reinvent the wheel and learn from your own mistakes, you can build on the expertise of those who have come before you.

This post will explore the varied roles a business advisor can fulfill, as well as how taking advantage of the opportunity to add an advisor to your team can significantly boost your business’s growth.

a bUSINESS aDVISOR’S ROLE

Business advisors can come in a variety of forms. Some are part of a collaborative group of local leaders who have similar goals and face similar challenges—a club of female Silicon Valley CEOs, for example—while others may work as paid consultants after retiring from their own C-suite gigs.

A good business advisor will do the following:

  • Review your internal systems. After an in-depth analysis of your current strategies or practices, a good business advisor will add value to your company by revising your current practices or offering alternative methodology. Always approach your advisor with a teachable attitude. Your current internal systems may be in desperate need of updating from a professional perspective.
  • Help you identify your long-term goals. During the first few years of business ownership, many entrepreneurs are too preoccupied with keeping day-to-day operations going to spend much time focused on their business direction. Working with an advisor to identify a solid, reliable financial vision can give you new direction and help you put productivity measures into place to meet these goals.
  • Share your business values. Just like entrepreneurs, business advisors come in all shapes, sizes, and business philosophies. It’s important to find someone whose goals and values line up with yours. No matter how well-intended, guidance from a business advisor whose style is diametrically opposite yours may not provide you with the best decision-making tools.

How an Advisor Can Help Your Business

By finding an advisor who fits the above description, you’ll be well-equipped to begin growing your business. A business advisor can even recommend other consultants to help you with specific tasks (for example, hiring an accountant to audit your finances or hiring an HR consultant to design a nondiscriminatory hiring policy).

It’s important to iron out a clear work plan and scope of duties for your business advisor. You don’t want to risk any miscommunication that could impact the quality of work provided. Don’t be afraid to schedule regular status meetings to assess your progress on identified goals and brainstorm ways to improve matters.

If you’re interested in hiring a business advisor but aren’t sure where to begin, Klein Hall CPAs can help. In addition to general accounting and bookkeeping services, we provide business advisory services to businesses of all sizes and types. To learn more about the services we offer, get in touch with one of the members of our dedicated and experienced team.

Is the Traditional CFO a Thing of the Past?

Even with a trend toward deregulation over the past few years, today’s regulatory environment for U.S. businesses can seem more complex than ever. Companies that don’t have finance managers or Chief Financial Officers (CFOs) can be at risk of running afoul of federal and state financial regulations, tax laws, and disclosure requirements.

For many businesses whose CFOs have grown into their current offices, it can be challenging to determine the duties a CFO should (or shouldn’t) be performing—or even to run down the many different tasks one’s CFO does during the typical workweek.

Learn more about the diverse array of responsibilities that often fall under the modern CFO’s umbrella, as well as how today’s top businesses are beginning to rethink and revamp the CFO’s role within a company.

Four Hats a CFO must wear

In the recently issued CFO and Financial Leadership Insights report by Michael Page, CFOs and industry experts working for some of the biggest companies in the world shared their opinions and experiences. The Insights report identifies four roles a top CFO must embody: Coach, Pilot, Scientist, and Engineer.

coach

Like any good sports coach or life coach, a CFO must serve as a mentor and a firm but compassionate leader to finance employees and other members of corporate leadership. Coaches must inspire those below them, making soft skills an incredibly important asset for a CFO.

pilot

Pilots can find many aspects of their job mundane or even boring, but in times of turbulence or crisis, they never lose a level head. Like airline pilots, CFOs must be able to look ahead to a short-term or long-term destination and maintain course even when things seem dicey.

scientist

In an ever-changing world, today’s CFOs must be innovators as well as rule-followers. Many of the nation’s top retailers, financial institutions, and service providers of the 1990s and early 2000s didn’t survive the Great Recession. A CFO’s ability to stay ahead of the curve when it comes to profitability, tax efficiency, and other financial matters has become crucial.

engineer

Companies of all sizes and types can benefit from an engineer’s meticulous and problem-solving nature, especially when dealing with complex financial, tax, and reporting regulations.

CFOs and finance managers who master each of these four roles can shift between them seamlessly to solve problems and accelerate growth for your business.

what do today’s cfos do?

Beyond these broad categories, there are some specific tasks and areas of responsibility that every CFO must cover.

regulatory compliance

One of a CFO’s biggest responsibilities involves compliance. While other fiscal employees can handle day-to-day items and accounts payable assignments, a CFO has a 10,000-foot view of the regulatory landscape and must make sure the business completes all its reporting obligations. CFOs must be able to motivate their employees to ensure that all applicable deadlines are met and that the data provided is trustworthy.

cybersecurity

Even if your business houses a separate IT department, cybersecurity decisions and precautions are squarely within your CFO’s wheelhouse. Financial information is subject to some of the most stringent privacy and security regulations out there, which means that a good CFO must have a solid grasp of potential security weaknesses and a plan for how to tackle them.

automation

The sheer number of tasks that must be completed on a daily basis can be overwhelming even for the most seasoned professional. It’s imperative for CFOs to avoid information overload by creating or facilitating a “data stream” that ensures they’re apprised of relevant information but aren’t bogged down with minute details.

If your CFO needs some guidance or would like to outsource certain tasks to a certified public accountant, Klein Hall CPAs can help. Our experienced staff has worked with a broad range of businesses, governments, not-for-profits, and individual clients in Chicago and the surrounding areas. Contact us today to learn more about the services we offer and to step into your financial future.

5 Mistakes That Can Kill a Small Business

In the startup world, stories of multibillion-dollar tech companies being launched from a garage or closet are legendary. But the Small Business Association (SBA) has some more sobering statistics. It reports that about 1 in 12 employer-owned businesses close each year, with only about 1 in 3 businesses still operating after 10 years.

With these challenges, it’s important to take lessons from other businesses’ mistakes without having to learn the hard way. Read on for five mistakes that can seriously cost your small or startup business.

Failure to identify market needs

Today’s technology-centered world provides a double-edged marketing sword for startups. It’s easier than ever to promote your own product or service from anywhere in the world—but on the other hand, you have to provide top-notch customer service to retain local customers who can just as easily purchase a similar product online.

As a result, knowing how to serve your customers’ needs—after first learning who your customers are—is the key to maintaining market presence and growth. Studies show that customers are often willing to pay nearly 20 percent more for a certain product or service just in exchange for good customer service. But the other side of that coin means that a single bad experience can send a lifelong customer packing. Knowing what constitutes good customer service for the majority of customers gives you the information you need to steer marketing decisions. 

Fortunately, today’s available data metrics are incredibly sophisticated and can provide businesses with a complex profile of just about every customer. Offering loyalty programs and discounts that link a customer’s purchases to their online profile can give you an even deeper look, allowing you to push sales to the customers who are most likely to take advantage of them.

Fear of “Firing” Bad Customers and Clients

Part of identifying your market needs includes a tougher task—essentially weeding out the customers who don’t provide a good return on investment (ROI) or who just make your life difficult. Certain “high-maintenance” customers may require far more customer service time from your employees, and the price for their services should be calculated accordingly.

Other problem customers who may need to be culled from the herd include those who frequently make returns or exchanges, who have made multiple online or in-person complaints about service (regardless of your employees’ efforts to address their concerns) or those who have verbally harassed your employees. Whether you simply raise these customers’ rates to accommodate for the issues they cause or bar them from your business entirely, you’ll improve workplace morale and ensure you can fairly compensate your employees for the extra issues they must address.

Refusal to delegate

Although just about every startup business requires a bit of initial solo effort to get off the ground, in order for your business to ultimately be successful, you have to do more than “buy yourself a job.” When you’re too busy getting through the day-to-day to focus on future planning, you can’t give your business the marketing it deserves. Everyone has just 24 hours in a day, and studying the habits of entrepreneurial giants reveals that these CEOs, CFOs, and company founders rarely venture below the big-picture-decision level.  

As a result, being able to delegate day-to-day tasks and decisions to trusted employees and managers leaves you free to do what you do best—pursue expansion opportunities, plan your business’s future, and learn more about your customers and clients. 

Taking a “Set it and Forget it” Attitude Toward Marketing

Taking a look at the many once iconic mega-retailers that have folded in the last decade shows that, for most, the death knell came from failing to adapt to the internet age. By the time these retailers realized that their sparse, hard-to-navigate, or malfunctioning website was costing them millions in lost sales, it was often too late to regain the market share that had already been ceded.

The lesson to be learned from this is that marketing success requires constant adaptation. It’s not enough to create some basic customer profiles and assume you’ll be able to keep up as they evolve; instead, you need to periodically review your customer data (as well as larger industry and marketing trends) to ensure you’re focusing your marketing dollars on the most up-to-date profiles.

Testing multiple new marketing channels at once and tracking clicks and conversions can give you some quick insight into which efforts are getting the most views (and the most sales).

Undercapitalization

Even the best marketing and management decisions may become irrelevant if your business lacks sufficient working capital. Absent an angel investor or another source of relatively no-strings-attached funds, maintaining a tight hold on working capital can be the difference between weathering a bad season and shuttering your business. 

Even if you’ve already delegated many of the financial decisions to a CFO or analyst, it’s incredibly important to regularly review your company’s finances and understand what’s being spent, where. If a product or marketing avenue isn’t yielding results within a few months, it should be given a fairly short leash; after all, no business has the time and capital to pursue unsuccessful projects indefinitely.

Maintaining an eye on the horizon (including hoarding cash and capital when a traditionally slow season is approaching) can keep you from being blindsided during a temporary market downturn. And if you anticipate needing additional working capital in the near future, seeking out your loan or cutback options before you’re in dire need of cash can give you the time you need to make the most prudent decision.

Avoiding mistakes in your small business

Although most business owners make countless other mistakes—large and small—every day, avoiding the biggest blunders a business owner can make should help your startup remain profitable for decades. Klein Hall CPAs can help. We’re a full-service CPA firm that offers everything from business consulting to accounting and tax preparation services to a broad range of clients in the Chicagoland area. Contact us today for more information about what we can do for you. 

5 Tips for Small Business Fraud Prevention

If you were presented with the opportunity to instantly improve your business revenue by 5 percent each year without increasing your sales volume or staff, you’d take it—right? Unfortunately, most business owners lose an average of about 5 percent of their annual revenue as a direct result of employee fraud, theft, and financial abuse. Since small businesses lose nearly twice as much per scheme, small business fraud prevention can be the key to profitability.

Stopping these fraud schemes in their tracks can not only boost your bottom line but it can also improve workplace morale. Read on to learn more about the most common types of small business fraud, as well as five concrete steps you can take to protect your livelihood.

Problem: Check Tampering

Solution: Extra Controls and Oversight

The advent of electronic banking has made it tougher for less-sophisticated fraudsters to steal company funds undetected. However, for the many businesses that maintain a physical checkbook, check tampering continues to be a problem. When purchase and inventory records aren’t verified, employees may be able to cash checks for more than the amount of a certain purchase (thereby pocketing the extra) or even steal blank checks entirely.

The most immediate solution to these common issues is a company-wide requirement that two or more employees sign off on all purchases. This ensures that transactions are verified before they occur, eliminating the need to try to untangle complicated invoicing arrangements after the fact. Business owners should also keep careful tabs on all checks, noting when there’s a gap between check numbers that could indicate that a checkbook has gone missing.

Problem: Padded Business Expenses

Solution: Clear Company Policies

One type of fraud that is often rationalized by otherwise ethical employees is the padding of travel or other reimbursable expenses. While government workers are often required to book their travel through certain price-controlled websites and submit itemized lists for reimbursement, private companies (particularly smaller ones) often require much less particularity in their expense documentation. This can encourage employees to round up their travel expenses, sometimes by hundreds of dollars, with the knowledge that they’re unlikely to be asked to provide documentation.

Including in your employee handbook some clear guidance and documentation requirements for reimbursable expenses can put an end to this practice. By ensuring that these guidelines are clearly communicated to your employees, you’ll quickly set a new status quo.

Problem: Fraudulent Billing Schemes

Solution: Cross-Training

For many small businesses, it often makes sense for each employee to have a distinct role. But giving one—and only one—employee the power to enroll new vendors or approve payments can increase the risk of billing fraud. By signing up “dummy” vendors (or even legitimate vendors in which the employee has a financial interest) and approving payment for services not rendered, an employee can divert quite a bit of money while evading detection.

By cross-training your employees to handle multiple roles, you’ll help shine a light on this type of fraud and reduce the risk of one employee running a personal enrichment program. Additionally, employees

with access to company financials should be encouraged to use all the annual vacation leave offered. If an employee seems reluctant to leave the job behind (even for a long weekend) or refuses to train other employees in parts of their job, this can indicate an attempt to conceal some type of financial malfeasance.

Problem: Time Theft

Solution: Productivity Goals

When employees don’t have enough to do (or just aren’t motivated to do it), they may work on personal projects or perform moonlighting assignments while on the job. Setting productivity goals can be a good way to combat this, as can performing a comprehensive, top-to-bottom job duties review for all employees. If it’s been a while since you’ve checked in on each employee’s workload or if you’re not quite sure what some of your employees actually do all day, there’s never been a better time to get started.

Problem: Lack of Trust

Solution: Standardized Hiring Practices and Background Checks

As a business owner, you want to—and should—be able to trust your employees. One way to build and maintain a trustworthy workforce is to standardize your hiring practices and make passing a criminal background and credit check a condition of employment.

Many individuals who are accused of embezzlement have a long history of misdemeanor charges for petty theft or bounced checks that should have been a red flag to an employer. Others’ credit histories may display clear evidence of delinquent payments, potentially making them ill-suited for a job where they have easy access to someone else’s money.

Engaging Small Business Fraud Prevention

Fraud is a part of our world, but it doesn’t have to be a part of your business. At Klein Hall, our Certified Fraud Examiners work diligently to detect, deter, and prevent fraudulent activity. If you’re ready to protect your small business with fraud prevention, investigation, and recovery services, give us a call at (630) 898-5578 or fill out a contact form today.