Made with Xara Web Designer Where Did The Money Go? Try Where Did The Money Go?TM  FREE For 30 Days... What Are You Waiting for? Testimonial “When I first saw this, I would have happily paid $1,000 - simply because Where Did The Money Go would save my bookkeeper 2 days per month - and give me better information about my business.” Brett Gilbertson, Major IT Fraud Bites Hard At Non-Accounting Educated Business Owners, Managers & CEOs Recent research shows that in tough economic times, fraud increases and the most vulnerable to attack are those businesses without accounting training in the senior management or leadership group. The conclusions from 2 separate pieces of research were published in the May 2009 edition of the Institute of Chartered Accountants in Australia journal “Charter”. Research by BDO Kendalls showed that nearly 20% of businesses in the not- for-profit sector (charities, foundations, community groups, clubs and religious organisations) had experienced multiple instances of fraud in the last 2 years alone The costs of fraud are undeniable and often devastating as it normally happens through long time employees in positions of trust. Recent cases started at $40,000 in losses and continued up to $500,000. These amounts would cripple most small businesses to the point of extinction, and yet research by Grant Thornton International showed that 60% of privately held businesses in Australia have no specific protections against fraud. The attitude of “I know it is out there, but it won’t happen to me” is alive and well and confirmed by the BDO Kendalls research, which showed that 84% of businesses believed that they weren’t at risk of fraud, yet paradoxically, 65% of businesses believed that fraud was a problem for the not-for-profit sector as a whole. Taken together, the research seems to show that most businesses would rather focus on maintaining their core business operations than implementing risk management strategies to minimise fraud. The most common types of fraud are cash theft, expense account overstatement, physical asset theft, intellectual property theft, credit card fraud, and payroll fraud. In one particular case, the “lack of financial acumen of the CEO and of the board” was specifically cited as a contributing factor to the success of the fraud. Richard Blakemore, a Chartered Accountant with management consultancy Delta Point Management takes up the thread, “I personally know of one instance where a business owner was defrauded of his whole business – and left with almost crippling debt – simply because he did not know how to read a set of accounting reports.  And the worst part about it was that the fraud happened through a family member.” Unfortunately, it appears that the great majority of tax accountants are completely swamped just trying to manage their clients’ tax affairs that they have neither the time nor the resources to devote to helping businesses better understand their finances, and close any opportunities for fraud. “Many business owners are crying out for someone to help them control their accounting better with budgets and proper management reporting, but when they have to wait months just to get a tax return done, they sadly stop asking their accountants to help.” In desperation, many are turning to the growing group of business coaches that has sprung up over the last few years. However, as Richard points out, “out of the hundreds of business coaches that I have met, only 3 had accounting qualifications. Most of the rest had less accounting knowledge than the businesses they were trying to coach. And I have lost count of how many times I have been brought in by business coaches as an expert to help a client get their accounting back on the rails.” Even then, sometimes it is too late. “I was called in to one manufacturing business last year that discovered 1 hour into our meeting, that they had been undercharging their labour by $20 per hour for at least 2 years. Unfortunately, they had taken too much of a financial hit, and they shut their doors soon after.” Richard’s eyes flash angrily. “And what really gets me riled was that it was a good business, making cutting edge machines that exponentially improved the productivity of its customers. It was the kind of business that we should be promoting to the world, and yet we lost it because of a lack of timely management accounting advice.” So what are the answers? “Well it seems that the only people who can sort this out are the business owners, managers and CEOs themselves. They must take responsibility for getting an accounting education,” says Richard. “That is why we have developed a management reporting software package called Where Did The Money Go? TM which is a steal at just $198. Most accountants couldn’t even provide this level of reporting for their clients for $200 per month – let alone $198 as a once off.” Richard continues, “In addition, we have been running a full day workshop on financial management for non-accountants also called ‘Where Did The Money Go?’ for the last few months. With other similar courses starting at $450 for a CD-ROM, the $275 inc. GST that Delta Point Management is charging for a face-to-face session limited to 30 participants represents fantastic value. Bookings can be made through downloading a booking form at www.deltapoint.com.au or by calling (03) 9800 4202 during business hours. With the economic times set to get tougher, the key to survival for many business owners and managers will be to access all the financial tools and smarts they can get.