4 Ways to Protect your Company from Cybercrime

4 Ways to Protect your Company from Cybercrime

It is estimated, across the globe, cybercrimes cost businesses $450 billion in 2016. Yet companies of all sizes continue to ignore these threats. Many business owners feel they are too small for a cybercriminal to waste their time. However, the opposite is often true. Small companies are assumed to not have the proper safeguards in place to protect themselves or even recognize an attack.

3 COMMON TYPES OF CYBERCRIMES

  1. Ransomware. A type of malware (a broad term for software, aiming to inflict damage or breach an IT system). Ransomware requires a company to pay a ransom to regain access to their files or server.
  2. Corporate Account Takeover. Another type of malware, which hijacks a user’s computer in order to trace anything from keystrokes to websites accessed. Malware is often invited into a network through an e-mail link or attachment. Unsuspecting employees click and download the program without knowing it.
  3. Identity Theft via Data Breach. Many companies have sensitive customer information that needs to be safeguarded. Companies known to have this sensitive data often are active targets of cybercrimes.

3 Things Companies can do to Protect Themselves from Cybercrime

  1. Conduct a Security Audit. Determine how easily a cybercriminal can assess a company’s server or files and find issues before they become larger problems.
  2. Test Employees. When it comes to cybersecurity, the number one threat is also the number one defender; company employees. Sending test phishing emails to employees to track how many click on the link or open an attachment.
  3. Have a Plan. An attack could happen, having a plan to resolve and react will save time and money.
  4. Assess Insurance Needs. Insurance can cover payments on ransomware or for downtime recovering from an attack. Determining the overall risk of these attacks will assist in determining the level of coverage, if any, needed.

How Smith Schafer can Help

  1. Review technology and security polices
  2. Technology planning and budgeting
  3. Technology coaching and executive education
  4. Work with IT vendors to implement a stronger security framework

CONTACT US

Keeping up with technology is a requirement for the success of a company. Click here to contact Smith Schafer’s Technology Services Group and learn how we can help. We look forward to speaking with you soon.

Tips to Prevent Employee Theft

Tips to Prevent Employee Theft

Learn How to Prevent Theft in Your Business

Not all crooks roam the streets at night. Some might be roaming your company hallways, stealing cash, forging or altering checks and pilfering your inventory and property. Even worse, they may be stealing intellectual property, such as confidential documents or trade secrets. What can you do to prevent employee theft?

Here are 18 crime busters:

1. Talk openly with your employees about theft and dishonesty. Set an example for ethical behavior.

2. Be suspicious of any employee with a sudden financial change. (Has someone started buying expensive clothes, gifts, or cars?)

3. Prosecute offenders. It helps deter further crime. Articulate a zero tolerance policy in your employee handbook.

4. Have the bank send all canceled checks and bank correspondence to a different address (for example, a post office box or your home).

5. Require employees to sign out and sign in equipment. When a staff member leaves the company, make sure laptop computers, cell phones and other equipment are promptly returned.

6. Periodically change locks on doors and file cabinets. And change computer passwords regularly, particularly after someone leaves the company on bad terms.

7. Keep a close eye on petty cash. Be skeptical about excessive voids, credits or damage claims. Investigate all missing documents. Do not let employees think no one notices when something is missing.

8. Visit frequently and unannounced your warehouse or storage areas. Look for suspicious patterns. For example, do certain employees always park near the door?

9. Randomly check deliveries to your business and your customers. There may be hidden stolen goods in them.

10. Never accept photocopies of documents like invoices and delivery tickets.

11. Look into unexplained employee absences. At the same time, be suspicious if a staff member never takes a day off. That could mean an employee is afraid that theft will be detected if he or she is not around to cover it up.

12. Spot-check phone bills for calls to unrecognized business numbers.

13. Conduct unscheduled audits. Pull purchase records from the company files and ask the person in charge if they compared prices. If not, why?

14. Require full documentation. Ask for receipts, delivery times and notes on the condition of goods when they arrived.

15. Pay only for what you receive. Remind staff members that the company does not pay for items not ordered, even if an invoice is submitted.

16. Get professional help. Ask your insurance agent to visit your business and check it out before buying a substantial theft insurance policy. Smith Schafer can perform an internal control study and make recommendations to segregate employee duties in a way that minimizes illegal activities and reduces theft.

17. Hire a bonding company to bond your employees, if possible.

18. Establish an anonymous tip program that allows employees to report questionable behavior.

These are only some of the steps your company can take to help prevent internal fraud.

If you discover suspicious activity and do not have concrete proof, get legal advice before confronting an employee. A false accusation could irreparably harm employee morale and could result in a lawsuit against your company.

For more information on this topic, contact your Smith Schafer professional or check out our Audit Service Page.

2019 Tax Deadline Calendar

2019 Tax Deadline Calendar

Tax Deadlines

Tax reform brought many changes to the tax code, however it did not change the statutory due dates for filing taxes. See below for important tax deadlines through the remainder of 2019.

April 15, 2019

  • Individual Tax Returns Due
  • Individual Tax Return Extension Form Due
  • C-corporations Tax Returns (operating on a calendar year) Due
  • C-corporations Tax Return Extension Form Due
  • Estates & Trusts Income Tax Returns Due
  • 1st Quarter 2019 Estimated Tax Payment Due
  • Last Day to make a Contribution to a IRA, Health Savings Account, SEP-IRA or Solo 401(k) for the 2018 Tax Year.

June 17, 2019

  • 2nd Quarter 2019 Estimated Tax Payment Due

September 16, 2019

  • 3rd Quarter 2019 Estimated Tax Payment Due
  • Extended Partnership Tax Returns Due
  • Extended S-corporation Tax Returns Due

September 30, 2019

  • Extended Estates & Trusts Income Tax Returns Due

October 15, 2019

  • Extended Individual Tax Returns Due
  • Extended C-corporation Tax Returns Due

Business Valuation & Succession Planning

Business Valuation & Succession Planning

How much is your business worth and what are your plans for the long run? These are questions every business owner will face at some point. Business owners invest many years of time, energy, and personal funds to build a business. Planning for your exit is often one of the hardest things a business owner must do. Contemplating the business you built or help to develop without you is complex, difficult and emotionally challenging. When succession planning is executed properly, it allows for the orderly transition of management while protecting the exiting owner professionally, emotionally and financially.

What should business owners do to prepare for business succession and how can they maximize the value of their business? 

  • The first step is determining a realistic value of the business. This is accomplished by having a valuation performed on an as-is, on-going basis of the business. Some owners may want to determine the annual value of the business for legal reasons, such as a buy/sell agreement, and others may want to be updated on an as-desired basis in order to keep track of the value of their estate.
  • The simplest and least expensive way to determine a value of the business is to engage a valuation expert to perform a Calculation of Value engagement. This calculates the value using the same general methodology of a more comprehensive Opinion of Value engagement, without the increased reporting requirements and therefore, without the increased fees for the service.
  • Another benefit of the Calculation of Value engagement is the professional’s assessment of the main drivers of value for the business. This may help the owner determine ways to increase the value of the business before they decide to transfer the ownership. The business owners may also use the information to help determine the best type of transaction for their economic needs.

Business Succession

  • Business succession transactions may be accomplished by gifting the ownership to family, key employees, or other individuals. Gifting is most common with family successions.
  • The business may be sold to employees, third parties, or may be combined with some amount of gifting. This type of transfer of ownership will be approximately the value determined when the business was valued as an as-is, on-going basis.
  • Businesses may be sold to a strategic buyer (someone already in the industry). A transaction with a strategic buyer usually occurs at a value higher than the amount determined with the traditional Calculation of Value engagement. The buyer may incorporate the revenue streams into their existing business and will be able to achieve increased profit and cash flow by consolidating specific overhead expenses. Example: Two facilities may not be needed and common business functions, such as administrative may be consolidated and the costs may be absorbed by the increased revenue. A specific Calculation of Value engagement may be performed to determine an estimated value of the business if it is sold to a strategic buyer.

CONTACT US

Determining the value of your business and incorporating this information into your overall financial, retirement, and estate planning, will help you manage the wealth of your business. To help business owners through this process, Smith Schafer offers business valuation and succession planning services designed to help businesses create and execute a successful transition strategy.

Smith Schafer works with companies, in multiple industries, to uncover the true value of their companies’ tangible and intangible assets. Whether you need help creating a succession plan or conducting a business valuation, our professionals can guide you. 

Cash is King – Improve your Cash Management

Cash is King – Improve your Cash Management

Most of us in the business world have heard the phrases “cash is king” or “it is trash until it is cash.” Do you know the last time you or your management team critically examined the policies and procedures directly affecting the cash management cycle? If your answer is no, continue reading to learn a few tips to improve your company’s cash management.

One of the simplest ways of better managing cash flow is identifying and implementing policies and procedures aimed at shortening the operating cycle.

[ Operating cycle is the time it takes to obtain the order, manufacture the item, ship the item, invoice the customer and collect the receivable, therefore converting the sale to cash. ]

Management must work closely with the appropriate individuals to review each specific area. Questions to ask yourself:

  • Are there ways to streamline the process of taking orders and getting them into the manufacturing schedule quicker?
  • Once in the schedule, are there methods to reduce the time it takes to manufacture the item and have it shipped to the customer? 
  • Is there “low hanging fruit” in the areas of invoicing and collections?
  • Are there areas we could automate to make accounts receivable management more efficient?   

All of these areas significantly affect your company’s cash flow management. We recommend your management invest time in order to make these as efficient as possible.

Did you know? New technology has allowed many companies to complete the invoice process the same day or even before the product is shipped. 

These are just a few simple ways to improve your company’s cash flow. If you would like to examine and quantify the potential benefits that your company can realize by shortening the operating cycle, contact us today!

2019 Contribution Limits

2019 Contribution Limits

For 2019, most of the limits will remain the same however there were a few key increases to be aware of. For example, the IRS increased the employee’s contribution limit for 401(k) plan participants from $18,500 per year to $19,000 per year. Also, the defined contribution plan annual contribution limit increased from $55,000 to $56,000. These changes will need to be reflected in your company’s plan administration and payroll processes. Below is a summary table reflecting some of the key benefit plan limits: 

RETIREMENT PLAN LIMITS

2018 2019
Annual compensation limit $275,000 $280,000
401(k), 403(b) & 457(b) employee contributions $18,500 $19,000
Catch-up contributions (if age 50 or older) $6,000 $6,000
Highly compensated employee threshold $120,000 $125,000
Key employee officer compensation threshold $175,000 $180,000
Defined contribution plan annual contribution limit $55,000 $56,000
Employee stock ownership plan (ESOP) limit for determining the length of the general five-year distribution plan $220,000 $225,000
ESOP limit for determining the maximum account balance subject to the general five-year distribution period $1,105,000 $1,130,000
Roth IRA and traditional IRA $5,500 $6,000
Roth IRA and IRA catch-up contributions $1,000 $1,000
SIMPLE salary deferral $12,500 $13,000
SIMPLE catch-up limit $3,000 $3,000

Contact Us

It is important to update plan documents and benefit plan materials to reflect the recent changes. It is also important to consider any individual participant notification requirements that are necessary to remain in compliance with plan rules. If you have questions about the changes, please contact Smith Schafer for assistance.