Author: Complete Controller

In our dynamic business landscape, it’s essential to be proactive in combating employee fraud and theft to foster a secure and thriving work environment. The Association of Certified Fraud Examiners (ACFE) 2020 Report to the Nations highlights that organizations lose approximately 5% of their annual revenues to fraud, making it paramount to address this issue. The impact is particularly noticeable for small and medium-sized enterprises, but we can significantly minimize these risks by implementing effective strategies. This article delves into the significance of tackling this challenge head-on and presents compelling statistics and facts to support our journey toward a more secure future.

The Importance of Addressing Employee Fraud and Theft

Fraud and theft by employees can take many forms, from skimming cash and asset misappropriation to sophisticated embezzlement schemes. Beyond the immediate financial losses, these acts can erode company culture, damage an organization’s reputation, and even pose legal liabilities. In a digital age where businesses handle vast amounts of data, the potential for information theft further amplifies these risks, making comprehensive fraud prevention strategies crucial.

Strategies for Reducing and Preventing Employee Fraud and Theft

Foster a culture of integrity

Creating a workplace that truly cherishes and acknowledges ethical behavior sets a solid groundwork for preventing fraudulent activities. Research from the Ethics & Compliance Initiative shows that companies with strong ethical cultures experience 50% fewer instances of workplace misconduct, such as fraud. This emphasizes the power of fostering an ethical work environment.

Implement strong internal controls

Adequate internal controls are the backbone of preventing employee fraud and theft. We can ensure financial integrity by distributing responsibilities, conducting consistent audits, and establishing robust inventory management systems. This proactive approach promotes accountability and safeguards our operations. Such measures ensure transparency and accountability, making it difficult for fraudulent actions to go unnoticed.

Leverage technology for fraud detection

With technological advancements, tools like AI-powered analytics and machine learning can identify patterns indicative of fraudulent behavior that might elude human detection. For instance, software that tracks employee expenses in real time can flag anomalies, such as duplicate claims, thereby preventing reimbursement fraud.

Promote whistleblower policies

We want to create an environment where employees feel safe reporting any suspicious activities without the fear of retribution. This will significantly help in deterring fraud. The ACFE’s 2020 report found that tips were the most common detection method, accounting for 43% of fraud cases. Establishing secure, anonymous reporting channels can empower employees to come forward with information that could prevent potential losses.

Conduct thorough background checks

Pre-employment screening can be a critical firewall against hiring individuals with a history of fraudulent behaviors. While respecting privacy laws and anti-discrimination legislation, verifying past employment, checking references, and conducting criminal background checks can reduce the risk of insider fraud.

Provide regular training and education

Employees are often the first line of defense against fraud. Regular training sessions that educate staff on recognizing and reporting fraud can enhance this defensive layer. Such programs should also clarify the legal and ethical implications of fraud, fostering a proactive stance toward prevention.

Intriguing Business Statistics and Facts

• The ACFE’s report highlights that small businesses (those with fewer than 100 employees) suffer the largest median losses due to fraud, at $150,000 per case. This stark statistic underscores the vulnerability of SMEs to internal threats.
• Surprisingly, fraud cases are not fleeting incidents. The same report noted that fraud schemes have a median duration of 14 months before detection, emphasizing the need for continuous vigilance.
• Substantiating the value of technology in combating fraud is poised to grow from $57.73 Billion in 2023 to $272.34 Billion by 2031, at a CAGR of 23.80%.
• The role of internal controls is further validated by findings that organizations with anti-fraud controls in place experienced significantly lower losses and quicker detection times compared to those without.

The detrimental effects of employee fraud and theft extend beyond financial loss, threatening the very fabric of an organization’s culture and integrity. However, businesses can significantly mitigate these risks by fostering a culture of ethical conduct, implementing robust controls, leveraging technology, promoting transparency, and engaging employees in fraud prevention efforts. Armed with the right strategies and an understanding of the prevalent statistics and facts, organizations can protect their assets and cultivate a workplace environment that values honesty and accountability. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Accounting information is the collected and stored particulars of a business’s financial and accounting data. It is used and processed by internal users. An accounting system is generally computer-based data. Accounting data goes beyond mere financial statements, balance sheets, and cash flow charts. It contains revenue, expenses, bookkeeping, customer information, data related to tax paid and due, and employee information. It also includes sales orders, purchase receipts, requisitions, invoices, ledgers, and such financial statements. 

Inventory is up to date in an accounting information system. Check registers that were previously made on old-fashioned paper registers are now maintained in computerized systems by installing special accounting data using specific software. This software makes data interpretation much easier to access and report.

This accounting data is for company use only and consists of customer and employee information and other sensitive data. It is highly secured. Security checks are maintained in the accounting information system, and hackers and other external sources are prevented from accessing the data.

Accounting information data is essential and must be interpreted correctly. If the interpretation is wrong, the company can lose money. Because of this, entrepreneurs must know the basics of accounting data and its elements. They must fully understand their financial statements. While they can delegate the job to accountants and other personnel, entrepreneurs must still understand the accounting information on their own. They should be able to access, interpret, and account for the information in both internal meetings and with outside sources.

Financial mistakes pose an adverse risk to business growth and can damage the reputations of customers and suppliers.

Common Mistakes Made in the Interpretation of Accounting Information and How to Avoid Them 

1. It’s common for business owners to intertwine personal and business finances. However, it’s vital to maintain a clear separation between the two. Segregating finances allows for accurate business expenses and profit tracking, leading to better financial management. By keeping these finances distinct, you’ll be empowered to make informed decisions and optimize the returns on your investments.
2. Entries are not done in time. Getting behind in bookkeeping and the submission of entries of expenses or sales will not yield an up-to-date picture of the business and will not allow you to make timely decisions. It can lead to a negative balance if the expenses are entered but the income statement is not updated. Invoices to be paid by the company may go unnoticed, leading to a bad reputation for the company. It can even end terms with suppliers. Business growth is halted or significantly reduced when you do not enter data in a proper amount of time.
3. Not setting up the proper software that is needed by the company leads to faulty decision-making. Furthermore, installing the wrong (more complicated than required or lacking crucial functions) software can lead to inappropriate data entry. Sound decisions are hard to make when your company lacks the proper accounting software that it needs.
4. Failure to double-check the reports and statements and, instead, just relying on checking the amount of net profit may lead to many errors or malfunctions in business. Accounting information software is just a tool. Decisions must be made after completely checking the reports and interpreting the data. Data interpretation is made by comparing financial statements with cash flow statements and balance sheets.
5. It is a must to keep all receipts until all taxes are paid and an audit is conducted. Even after that period, receipts are important for matching data entries in registers or software.
6. After a long day of work, mathematical or data entry mistakes are more likely. Stay focused. One mistake can lead to considerable errors.
7. Entrepreneurs and business owners must focus on the long-term consequences of the decisions they make after gaining a full picture of their accounting information. Making short-term decisions after interpreting account data does not set the business up for long-term benefits. Always focus on the future and the bigger picture.

Conclusion

The correct interpretation of accounting information is the backbone of any business. Specifically, focus on accurate bookkeeping practices and be sure to pay attention to every little detail so that you can take that information and make wise decisions for your company.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Accounting and bookkeeping play vital roles in any business. Accounting encompasses the systematic and comprehensive recording of financial transactions, while business bookkeeping involves recording financial transactions as part of the accounting process.

Addressing minor business accounting errors with confidence and sincerity is crucial for long-term success. From minor mistakes to major bookkeeping errors, these issues can seriously threaten a business. By embracing regular and accurate accounting practices, entrepreneurs can gain insights into their financial situation and make effective decisions. It’s vital for business owners to recognize how addressing these common accounting errors with enthusiasm and optimism can significantly impact the long-term growth of their business.

Here are several common accounting errors that can significantly harm businesses.

Not Using an Accounting Software

Manual work is always the toughest and is at risk for errors. Even a minor accounting mistake can have significant repercussions for businesses. Small and medium-sized businesses should use appropriate accounting software according to their type of business. Cloud accounting is a modern and efficient accounting method that utilizes software, delivering numerous benefits specifically tailored for small and medium-sized businesses.

Manual accounting is extremely time-consuming and significantly increases the likelihood of errors. While using accounting software not only diminishes the chances of errors, but the software also takes much less time for accounting operations.

Choosing the appropriate software is an important and challenging step in business according to your needs. When selecting software for your small business, it’s important to consider the cost, usability, and additional features carefully.

Features of accounting software must include:

1. Inventory management
2. Sales tracking
3. Contact management and contact history following
4. Account to accept credit card payments
5. Producing invoices
6. Financial statements, cash flow statements, and balance sheet
7. Budget planning
8. Payroll
9. Taxation matters

Infrequent Bookkeeping

Maintaining up-to-date bookkeeping and accounting statements is absolutely essential for the success of any business. Falling behind in bookkeeping and neglecting to record expenses or sales in a timely manner can lead to an inaccurate representation of the business, hindering timely decision-making. This situation may result in a negative balance if expenses are overlooked and not reflected in the income statement. Additionally, unpaid company invoices could slip through the cracks, damaging the business’s reputation and potentially straining relationships with suppliers. Such issues can impede business growth or place significant limitations on it. It is common for small businesses to encounter challenges in producing monthly financial statements, but staying on top of this is crucial for ensuring the health and success of the business.

Mixing Personal Finances with Business Accounts

• Business owners combine their cash with business expenses. Maintaining a clear separation between personal and business finances is essential. When they’re intertwined, it becomes tricky to distinguish between business and personal expenses, hindering accurate assessment of invested capital’s profitability. Keeping them separate ensures clarity and helps in effectively managing both personal and business finances.
• A business credit card is designed exclusively for covering business expenses, and it’s crucial to keep personal purchases, such as holiday trips, separate from it. The expenses are intended to be reimbursed from the company’s funds, which is a standard and appropriate practice.
• During purchase orders for an inventory of the company, procurements are also made for private use.

Covering small expenses in a business out of pocket

Entrepreneurial leaders frequently use personal funds to cover small business costs, aiming to streamline operations. Unfortunately, these expenses go unaccounted for in the company’s financial documentation, leading to an inaccurate portrayal of its profitability.

Interest on debts for managing payroll.

Small—to medium-sized businesses get loans at the time of monthly payroll. The business’s income pays back the loans with interest. Sometimes, the debts increase, as does the interest on those debts. Businesses can, instead, get the services of payroll companies to avoid heavy long-term debts.

Conclusion

Small business accounting errors range from minor to major accounting and bookkeeping errors, which can cause grave danger to the business. Accounting problems start with irregular bookkeeping and the lack of accounting software. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In today’s ever-changing business environment, it is essential for businesses of all sizes to master stock inventory management. Effective inventory control is crucial for smooth operations and plays a significant role in customer satisfaction and cost efficiency. While the multitude of inventory management tools available can be overwhelming, gaining insights into the top players in the market empowers you to make informed decisions. Let’s explore the leading options for stock inventory management and their crucial importance and include some compelling facts about small businesses along the way.

The Importance of Stock Inventory Management

Let’s delve into the amazing advantages of inventory management tools and grasp why they are absolutely vital for driving business success. Inventory management lies at the core of ordering, storing, utilizing, and selling a company’s inventory, which covers raw materials, components, and finished products. It also involves expert management of warehousing and processing these invaluable items.

Cost optimization

Proper inventory management helps in reducing the costs associated with overstocking and stockouts. By having the right balance, businesses can avoid unnecessary storage costs and lost sales.

Efficiency and productivity

By automating inventory processes, businesses can save time and reduce errors, thereby increasing efficiency and productivity.

Customer satisfaction

Having the right products available at the right time enhances customer satisfaction and loyalty, which is central to business growth.

Data-driven decisions

Effective inventory management provides valuable data that can help businesses forecast demand, make informed purchasing decisions, and optimize their sales strategy.

Top Options for Stock Inventory Management

Shopify

Ideal for e-commerce businesses, Shopify not only helps in creating an online store but also offers powerful inventory management tools. Businesses can track stock counts and automatically stop selling products when inventory runs out.

QuickBooks 

QuickBooks is great for small to medium-sized businesses looking for an all-in-one solution. It provides features like order management, product information management, and multichannel sales support.

Cin7

Cin7 is a cloud-based inventory management system suitable for businesses with complex supply chains. It integrates with over 450 platforms and provides real-time inventory tracking, point of sale, and e-commerce capabilities.

Zoho 

Zoho is a cost-effective option for small businesses. It offers features like order management, tracking, and multi-channel selling, all integrated into the Zoho ecosystem.

Square for Retail

Square for Retail provides the perfect solution for brick-and-mortar stores, with its seamless point-of-sale system, inventory management, and customer relationship management all in one convenient package.

The Role of Inventory Management in the Success of Small Businesses

For small businesses, efficient inventory management can be the difference between thriving and surviving. Here are a few compelling facts:

Cash flow management

According to a U.S. Bank study, 82% of business failures are due to poor cash flow management. Effective inventory management helps in freeing up cash that is tied up in excess stock.

Customer expectations

A report by the National Retail Federation found that 97% of consumers have backed out of a purchase because it was inconvenient. Accurate stock levels ensure that businesses can reliably meet customer expectations.

Growth and scalability

As businesses grow, managing inventory becomes more complex. Adopting a robust inventory management system early on can facilitate smoother expansion and scalability.

Final Thoughts

Stock inventory management is not merely about keeping track of products; it’s a strategic element that directly affects the bottom line, customer satisfaction, and business agility. The best inventory management tool for your business depends on your specific needs, including the size of your business, the complexity of your supply chain, and your budget.

Don’t forget that by choosing the right solution, you can make substantial cost savings while enhancing efficiency and providing a superior customer experience. In the dynamic world of business, the right tools and strategies can set you apart from the competition. Thus, selecting an effective stock inventory management solution isn’t just a choice; it’s a strategic investment in the future of your business. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In the bustling corridors of the business world, the shadow of fraud and employee theft looms large, posing daunting challenges for businesses, big and small. However, fear not! With a sprinkle of diligence and a dash of proactive measures, we can armor our ventures against these unwelcome threats. Join me on this enlightening journey to demystify fraud and employee theft, explore preventive tactics, and glance through some eye-opening statistics that underscore the importance of safeguarding your business.

A Closer Look at the Culprits: What Are Fraud and Employee Theft?

Fraud, in its many guises, refers to deceitful practices aimed at financial or personal gain. When we narrow down to the business context, it encompasses a wide range of activities—from forging checks to manipulating financial statements. Employee theft, a subset of fraud, involves the unauthorized employee taking of a company’s money, goods, or services. It’s an insider job, where trust is the double-edged sword.

The Art of Prevention: Policies and Plans

Preventing these sinister activities involves a blend of common sense, strategic planning, and a touch of creativity. Here’s how you can fortify your business:

Culture is key

Cultivate an ethical workplace culture. Encourage transparency and open communication. A happy and respected employee is less likely to bite the hand that feeds.

Checks and balances

Implement internal controls. Regular audits and segregating duties can make it harder for fraudulent activities to go unnoticed. For instance, the person who authorizes transactions should not reconcile the accounts.

Technology to the rescue

Leverage technology for superior surveillance and security. Advanced software can detect irregular patterns and prevent unauthorized access to sensitive information.

Educate and empower

Train your employees to recognize and report suspicious activities. A well-informed team is your first line of defense against fraud and theft.

Screen thoroughly

Thorough screening in the hiring process is key to addressing potential issues early. It’s an essential step in preventing problems down the line. Background checks, though they might seem tedious, are your friend.

The Tales of Deception and Valor: Examples and Statistics That Tell the Story

Considering the abstract nature of fraud and employee theft, tangible examples and statistics can provide a clearer picture. Did you know that according to the Association of Certified Fraud Examiners (ACFE) 2022 Report to the Nations, businesses lose an average of 5% of their revenue to fraud each year? This staggering statistic underscores the pervasive nature of this issue.

One classic example of employee theft is the case of a bookstore manager who, over several years, pocketed cash from daily sales, leading to substantial losses for the small business owner. It was only after implementing stricter cash handling procedures and installing surveillance cameras that the nefarious activities came to light.

On the other hand, a tale of bravery: a technology startup, after rigorous screening and continuous monitoring, managed to identify and resolve a potential data breach, preventing potential losses worth millions for the company and safeguarding its customers’ data.

Sealing the Vault: The Way Forward

Navigating the treacherous waters of fraud and employee theft requires vigilance, resilience, and a proactive approach. Businesses can shield themselves against these adversities by fostering an ethical culture, enforcing robust policies, and embracing technology. Keep in mind that it’s not just about reacting but about being proactive and preventing issues.

As we wrap up this exploratory voyage, let’s take to heart the lessons learned and the strategies discussed. The battle against fraud and employee theft is ongoing, but with the right tools and attitude, it’s a battle we can win. Armed with knowledge and preparedness, step forth and safeguard your business’s future because in the realm of commerce, forewarned is forearmed. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Do you often find yourself rummaging through the jumble of paper and miscellaneous items in your purse? Or do you have a cluttered junk drawer overflowing with unopened bills, invoices, and receipts? We all do! But it’s time to end the clutter and free ourselves.

Managing the constant influx of incoming and outgoing paperwork, such as bills, invoices, and receipts, can often feel overwhelming and daunting. Even at times, it may feel like you need a team behind you to handle all these things for you. While larger businesses can outsource their bookkeeping responsibilities to a dedicated professional team, some individuals may have the luxury of hiring a personal assistant to handle these administrative tasks. However, for most people, managing their expenses and the associated paperwork falls squarely on their shoulders. That’s a lot to carry, not to mention everything else you have to do and carry with you.

To help alleviate the stress of organizing these financial documents, here are some valuable tips and strategies that can be employed.

Go Paperless

There is no denying that technology has taken over every area of our lives. We are dependent on our phones and computers and cannot seem to go without them. Now you have the extraordinary ability to de-clutter! Most people own a computer, laptop, or phone, and there are plenty of apps and services online to help you keep track of your important financial documents.

The cloud can be beneficial and eliminates paper everywhere. By digitizing your paper receipts and storing them in cloud software like Google Docs, you can stay organized, reduce clutter, and minimize the chance of misplacing important documents. Even simple software such as Excel is beneficial in eliminating paperwork and creating, categorizing, and formulating your budget. You just need to find what works for you and your lifestyle.

There are unlimited iPhone/Android apps available for balancing your bank account and expenses instead of having to rely on paper, pen, and a checkbook like in the past. If you are a tech-savvy person, going digital might be your best option.

Paying your bills automatically is a fantastic way to make sure you never miss a payment and free yourself from the stress of managing piles of mail. Most companies provide electronic statements, and some even offer incentives to switch to paperless. Take one thing off your mind and switch to auto bill pay today.

Be Prepared for Tax Season

Taxes are forever. Always remember that you will have to file your taxes every year and report specific information to the IRS. It is easier to be prepared rather than unorganized when it comes time to file. Organize expenses and receipts in a way that is easily accessible and accurate. Make sure you have a system in place to prove any business expenses you plan to write off. This can be a digitally scanned copy or written journal, but it must be accurate and complete. There are now apps that can even help with locating and tracking all your business expenses to make filing your taxes that much easier.

Also, keep an online folder or file cabinet of previous tax returns on hand for at least five years. Make sure you have a backup of important tax documents such as pictures or scanned copies and avoid falling victim to a system crash or even… an AUDIT. 

Categorize Your Receipts

Organization is vital to anything. If you prefer to keep a paper-based account, categorizing your receipts is helpful for organizing paperwork. Simply separate files by categories, such as business expenses, grocery receipts, school expenses, charity donations, credit card purchases, and insurance payments. Or, if you prefer to organize them by month, that is also a helpful approach. You can color-coordinate or use symbols to help label and file your office supplies neatly. Find what works for you and stick with it. 

Avoid piling them up, and be diligent in filing as soon as possible to keep things neat and orderly. Should you go paperless, as mentioned above, the same techniques apply. You can color-coordinate and label your spreadsheets and/or online tools. It comes down to doing what works for you.

Conclusion

Stop mindlessly tossing unopened envelopes into a drawer alongside your grocery receipts. Instead, try these practical suggestions to keep your space organized and tidy. You don’t need to strive for perfection, but taking proactive steps is important—progress, not perfection. While you may not have complete control over your finances, you can definitely manage the clutter they generate!

 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Downsizing improves an organization’s productivity, efficiency, and competitiveness. However, the workload remains the same.

Reasons

The main reasons for downsizing a business are to lower costs and increase the company’s productivity. Other reasons include restructuring the organization and eliminating redundant or no longer necessary positions to run the business. Even a merger of two organizations to enhance the productivity and efficiency of the brands can trigger downsizing as a certain amount of workforce would be required after the merger of two organizations into one. Therefore, the employees with excellent performance and whose skills would be needed for the company later do not fall victim to downsizing.

Several situations lead to the downsizing of an organization.

Situations Leading to Downsizing

1. Low Performance: When a company’s product price is not competitive in the market and when it fails to modify its product or service according to customers’ demand, its overall performance suffers. The company can also lose a competitive edge in the market if it does not stay up with the times and focus on marketing in the modern age and advancing technology.
2. Reduction in Cost: As employees’ salaries are mentioned as a liability on the balance sheet, they can easily cut costs by reducing manpower and putting pressure on the existing employees. Anytime a business experiences a downturn, decisions must be made about ways to save costs, and the number one cost in every company is salary and benefits. Therefore, layoffs often occur to reduce costs.
3. Desire to Increase Value: Downsizing grabs the attention of shareholders towards the company and gives a message to the investors that the company is ready to increase its profitability in the existing situation as a major portion of the cost has been cut. In this manner, investors start taking an interest in the company’s shares, hence increasing their value.

Types of Downsizing

A priority is that the employees of the company should leave with dignity. However, there are several types of downsizing an organization can go for.

1. Reduction in the Workforce. This is the most favorable strategy an employer chooses in the earlier stages of downsizing. The employer tries to attract the workforce to resign or retire. Certain departments offer early retirement packages so employees can leave with dignity.
2. Redesigning Work. In this form of downsizing, vacant positions are removed by redesigning the organization’s layers and functions. It also includes redesigning jobs and functions, where a layer is removed by changing the job responsibilities of the existing employees.
3. Approaching the System. This includes changing the organization’s culture, where some activities are removed to increase productivity. This measure is usually taken during major crises, and the employees usually appreciate this approach.

Benefits of Downsizing

If done right, downsizing proves to be the most beneficial activity for managers. It saves the business, lowers operational costs, brings transparency, strengthens relationships between employees and managers, promotes teamwork, re-evaluates the whole business, and brings the business into a manageable condition.

Disadvantages of Downsizing

Every action has a drawback. Despite all the benefits, downsizing may damage the organization’s credibility, reduce staff, increase workloads, lower the bottom line, negatively affect public perception, and destroy the organization’s image. Public demand is usually affected by how an organization treats its employees; downsizing might reduce the company’s public demand.

The public and employees of an organization do not usually appreciate downsizing, which can create job security issues for existing employees. However, it can attract investors to an organization and enhance efficiency and productivity.

In conclusion, downsizing presents itself as a double-edged sword for any organization. The advantages are numerous, including lower operational expenses, improved productivity, and the opportunity to reorganize the business into a more efficient and transparent organization. These advantages can lead to strengthened relationships between employees and managers, foster teamwork, and ultimately save the business from potential downfall. However, we cannot overlook the disadvantages. Downsizing may tarnish the organization’s reputation, increase the workload on remaining employees, spread negativity, and potentially harm the company’s public image and demand. While it may secure short-term financial stability by attracting investors and enhancing productivity, the long-term impacts on employee morale and public perception can be detrimental. Therefore, downsizing must be approached with caution, balancing the immediate financial benefits against the potential long-term consequences on the company’s culture and public image.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The consulting field is incredibly dynamic and in high demand, making it an exciting and rewarding career choice. With its diverse applications across various industries, consulting offers ample opportunities for those with a solid educational background. But what sets top consultants apart from the rest? Here are some valuable tips on establishing yourself as a respected and sought-after professional in this thriving field.

An Overview of the Consulting Profession

Consultants are highly versatile professionals who can be found across various sectors based on their expertise and chosen focus. These sectors encompass management, law, communication, IT, marketing, and human resources. The diverse opportunities reflect the broad spectrum of fields where consultants can make a significant impact.

The important thing to become a consultant is to follow for at least five years. During your years of study, you acquire the necessary theoretical knowledge, but you also put into practice some of what you acquired through an internship or related work. Therefore, you can work freelance on behalf of a firm or be directly integrated into the company.

The Characteristics of a Good Consultant

In addition to intellectual baggage, you must also have the characteristics necessary for the success of your job as a consultant. Above all, it is an expert who can intervene in various company problems.

Empathy must also dominate because, above all, the company needs it, not the other way around. After that, his work needs a certain sense of listening, arrogance, creativity, and excellent organization. 

Otherwise, he could lose himself. The solutions must be found together, even if the consultant provides the essentials. Thus, an excellent collaborative spirit is necessary.

Be that as it may, the consultant must always keep an objective eye because he has the advantage of being an external person to the company, able to identify problems and find innovative solutions better than the employees who are on the inside.

To excel as a consultant, you must complete the required training, specialize in your chosen field, and develop essential skills and traits.

Accompanying Companies: What is the Role of the Consultant?

Many companies today call on this external professional to assist them in making decisions during the activities to make profits. Others, however, are still reluctant to seek a consultant’s help, thinking that it is not helpful and that it is possible to find advice from employees. What is the true role of a consultant in a company? Here are some answers to explain their importance.

An objective and practical look

As an external service provider, the consultant considers the company manager not his boss but his client. This leads him to carry out an objective and external look at the company, which employees can not perform because they are inside.

Thus, he has greater freedom of judgment when advising his client and even when he is discouraged without fear of crumbling. On the contrary, his eyes and judgments are more objective without ordering or giving lessons to the leader.

Effective knowledge of the company

Beyond this objectivity, the consultant must still put himself in the company’s shoes to better identify its needs, weaknesses, and strengths. He must be able to understand the company and be reassured before providing the necessary solutions.

At the same time, he maintains an excellent critical spirit. A good consultant stands out above all, not by the knowledge acquired in his studies but by his experience, which helps him more easily understand the company’s needs and find practical solutions.

Summary

In essence, no matter the size of your business, it’s beneficial to enlist a consultant’s services. Their expertise offers invaluable guidance for decision-making and greatly enhances all facets of your business operations. I highly encourage you to consider this proactive step!

 

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Discovering the overhead rate and percentage of small business benefits is an essential process that involves dividing indirect expenses by direct expenses. It’s ok; I know it seems overwhelming already, but it’s not. Once the company pinpoints its overhead costs, it becomes easier to establish fair prices for products and services. This step is crucial for the company as it can potentially lead to lower prices, enabling it to maintain a competitive edge. The ultimate goal of determining the overhead rate and percentage of expenses is to make well-informed decisions about the right and appropriate cost of products. This strategic approach will contribute to the company’s overall success and growth.

Determining the overhead rate and percentage for a small surveying business is a multi-step process that requires careful consideration. Don’t worry; I’m here to help you through each step.

Step 1 – Calculate the Sum of the Company’s Direct and Indirect Expenses

This is the primary step in determining the overhead rate for any company, no matter how big or small. To calculate the direct expenses, align the cost of direct labor and direct material required to manufacture the products or services the company offers. For example, if the company sells mobile phones, the cost of material, labor costs directly paid to the workforce, and everything else involved in manufacturing the mobile phones will be included in the direct expenses. The number of products manufactured each year directly correlates with the cost increase. This financial dynamic underscores the importance of efficient cash flow management for sustainable business growth. However, determining indirect expenses aligns all the costs involved indirectly with manufacturing the products, such as the sales and customer services department, taxes, marketing and administrative fees, insurance, etc.

Step 2 – Calculate the Overhead Rate

Once you have calculated the company’s direct and indirect expenses, the next step is to divide the sum of all direct expenses by the sum of all indirect expenses. This results in the overhead rate.

Step 3 – Calculate the Overhead Percentage

Once you have calculated the overhead rate of a small surveying business, you must multiply it by one hundred to determine the overhead percentage.

How Often are Overhead Rate and Overhead Expense Ideally Calculated for Small Surveying Businesses?

In many countries, the overhead rate and percentage are typically calculated yearly. However, in a small surveying business, the overhead rate and percentage may be calculated monthly to evaluate the expenses and costs in the premature stages. Frequent calculation and evaluation will lead the company to revise and analyze its costs and expenses.

Why is it Important to Determine the Overhead Rate and Expenses?

Calculating the overhead rate and percentage is an essential aspect of financial management for businesses across all industries. These figures are pivotal in helping management enforce prudent and efficient operations. By calculating the overhead rate and percentage, a company can gain valuable insights into its cost structure and profit margins. This, in turn, allows for a more accurate assessment of the impact of overhead on various costs involved in the business.

Moreover, the overhead rate and percentage are instrumental in predicting the company’s profitability for the upcoming months and years. A company must have overhead expenses and costs that cover operational expenses and include a healthy profit margin.

By consistently reviewing overhead costs bi-monthly, monthly, and quarterly through bookkeeping practices, a company gains a better understanding of its cost dynamics. It can make informed decisions about pricing strategies for its products and services. Implementing a thorough and strategic approach to managing overhead costs, including expenses related to rent, utilities, and administrative salaries, is crucial for sustaining the financial health and stability of the business.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By conducting a few focused Google searches, you’ll discover a treasure trove of valuable insights on the exciting journey of launching a business. Countless success stories showcase how startups have blossomed into influential businesses. While finding specific case studies for your industry or business model may seem challenging, the wealth of information available will undoubtedly guide you toward achieving your entrepreneurial goals.

The most dependable way to elevate your business idea is to have confidence in proven methods that other successful entrepreneurs have used to achieve their goals.

Focus on Productivity and Not Only on Activity

Embrace the notion that it’s okay not to be constantly busy. Take a moment to reflect on what truly matters to you today and in the future, and strive to make your activities purposeful. Organize your tasks in a way that provides clarity on your next steps. As highlighted by leadership expert and coach Leah Wultschik, constant busyness among leaders may hinder creativity and strategic thinking. Instead of being busy just for the sake of it, aim to be proactive and intentional in your actions. This approach allows for the space and time needed to make thoughtful, innovative decisions. By focusing on tasks that truly contribute to your goals and objectives rather than simply keeping busy with unimportant activities, you can tap into your full potential and drive yourself toward even greater success.

Hire the Best Talent Possible

Here are some valuable insights from Aislinn Malszecki, who leads content strategy and community at MaRS, to help you in your quest to hire the best talent:

1. Strategic hiring: Take the time to find candidates who have the right skills and align with your company culture. Avoid rushing decisions and focus on making the best choice.
2. Showcase your company: Build a positive buzz around your company by leveraging your reputation and personal connections to attract the right individuals to join your team.
3. Utilize your network: Go beyond traditional job postings by tapping into your network and your employees’ connections to identify like-minded potential hires.

Assembling the right team is pivotal. Collaborating with the right individuals can be the catalyst for propelling your business forward. Surround yourself with inspiring people who share your vision.

Partner with an Agency

The opportunity cost of daily operations can add up fast and take its toll if you try to do everything yourself. Therefore, it’s better to work with an agency. The initial cost of outsourced work will eventually be lower than trying to do everything on your own.

Patrick Woods, who holds the director of customer success position at Keen IO, has articulated several challenges that arise when collaborating with an external agency. To overcome these obstacles, he suggests the following:

• Build a relationship with the agency: Take time to get to know the people you will be working with. Determine fit and expectations.
• Communicate: Staying in touch is key as startups move fast. Regular, clear communication with the agency ensures we’re all aligned and moving forward together positively.
• Understand what the agency can do for you: Clarify the core strengths and competencies of the agency’s staff. Establish which tasks you want them to take over and which ones you want to handle in-house.

Beware of the Negativity

I truly appreciate the incredible enthusiasm exhibited by you and your team. Your passion and energy play a significant role in driving the success of our company. Your positive attitude is contagious and has the power to uplift and inspire everyone around you. We can achieve great things together and create a thriving, productive work environment. On the other hand, a lack of enthusiasm can dampen morale and hinder progress. Therefore, fostering a culture of enthusiasm and passion within your company is crucial to drive success. When you’re confident and optimistic, it inspires your employees to feel the same way and motivates them to follow your lead eagerly. Renowned author and keynote speaker Jon Gordon has emphasized that negativity can significantly affect your team’s morale, presentation, and productivity, leading to decreased energy and increased stress. As a leader, it’s essential to foster a positive work environment. By setting a tone of positivity, you can inspire your team to do their best and contribute to a lively and productive workplace.

Avoid Burnout

James Schramko, the founder of SuperFastBusiness, is a strong proponent of prioritizing adequate rest and sleep. According to Schramko, ensuring sufficient rest can lead to a significant improvement in overall performance. The repercussions of sleep deprivation can be quite substantial, encompassing issues such as depression, a compromised immune system, cognitive difficulties, and an increased risk of obesity. Furthermore, the costs associated with experiencing burnout can be extremely high, particularly if it renders an individual unable to work for an extended period. It’s crucial to consider these potential consequences carefully before reaching such a point.

Prioritize

It’s impossible to do everything in just 24 hours. We all lead busy lives, and that’s why Derek Sivers, the founder of CD Baby, follows the “Hell, yeah!” or “no” philosophy. According to him, saying “no” to most things creates space in your life for the few things that genuinely excite you. When you’re torn between a “yes” and a “no,” he recommends leaning towards “no.” Embrace the opportunities you’re truly passionate about and simply can’t turn down. This approach allows you to focus on what truly matters and brings you joy.

Final Thoughts

Thinking about the journey from being a startup to an established business is exhilarating. It’s a process that takes time, and it’s important not to rush it. When everything falls into place, you can transition smoothly from one stage to the next. Trying to force growth could create unexpected challenges, so it’s best to let things unfold naturally. Stay patient and focused, and success will follow! About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.