February 27, 2018

How Manufacturers Can Detect and Prevent Fraud Using Inventory Internal Controls

Without strong internal controls, organizations are much more susceptible to fraud. This is especially true for manufacturers, who experience the third highest percentage of all fraud cases according to the Association of Certified Fraud Examiners’ (ACFE) 2016 Global Fraud Study.

Finding Fraud Opportunities in Inventory

Pressure, opportunity, and rationalization are considered the three components of every fraud. If a fraud perpetrator is looking for an opportunity at a manufacturing organization, they’ll frequently find it somewhere in the inventory cycle. The ACFE found that a majority of schemes were related to asset misappropriation. Inventory is a vulnerable piece of operations because there is often a high amount of volume, a large number of employees with physical access, and there can be many different steps in the production process. Those risk factors become compounded when the inventory is small, has a high value or is in high demand. Below are a few controls to implement to detect possible inventory fraud.

Detective Controls:

  • Perform inventory counts
  • Carry out reviews or reasonableness checks for production costs and inventory
  • Review or investigate inventory write-downs
  • Reconcile labor and overhead costs charged to inventory

Cutting Costs through Fraud Prevention

According to the 2017 Leading Edge Alliance Manufacturing Outlook Report, most manufacturers consider cutting operational costs to be a top priority to succeed. With the average fraud in the manufacturing industry lasting 18 months and costing $194,000, it’s crucial that organizations both implement internal controls as soon as possible and/or have maintenance procedures in place.

While there is no one-size-fits-all approach to an internal control system, below are some internal controls manufacturers can implement to prevent inventory-related fraud:

Preventive Controls:

  • Limit and restrict physical access to inventory and materials to only include authorized employees
  • Segregate the inventory custody from other duties such as billing, purchasing, shipping or recordkeeping
  • Establish a formal policy to identify and designate scrap or defective items
  • Separate the responsibility for identifying or designating scrap from disposing of it
  • Require employees with inventory responsibilities to take time off. When someone else performs their duties, inappropriate behavior can be caught
  • Install video cameras in warehouses where inventory is stored

For help assessing and improving your organization’s internal control environment to prevent fraudulent activity, contact an Anders advisor.

All Insights

February 22, 2018

Anders Releases 2017 Community Impact Report

Giving back is part of our social responsibility and corporate culture at Anders, and we proudly support local charitable, civic, community and trade organizations. The Anders Community Impact Report takes an in-depth look at our commitment, connections and involvement in the community in the past year, individually and collectively as a firm.

In 2017, Anders employees gave back to the community by:

  • Volunteering 2,349 hours
  • Sitting on 87 not-for-profit boards
  • Being active members of 145 local organizations
  • Participating in 104 charitable sponsorships
  • Donating over $20,000 to our 2017 Charity of Choice

Read more in the Anders Community Impact Report.

All Insights

February 20, 2018

New Construction in Downtown St. Louis with Ball Park Village Phase 2, Scottrade Renovations and More

As a downtown St. Louis accounting firm, we’re very interested in the new construction that comes to St. Louis and its effect on the city. Our employees work and play downtown, and it’s exciting to see our home thrive with new business and opportunity. Below are a few interesting construction projects we’re keeping an eye on around downtown St. Louis.

Ball Park Village Phase 2

With views of Busch Stadium from the Anders office, we have a front row seat to Ball Park Village Phase 2 breaking ground. On the west side of the existing Ball Park Village there will be a large office building and hotel with special events space. While the east side will house a 29 story residential apartment building. Both sides will have outstanding views into the Busch Stadium, and additional retail and restaurants in between. The office building and hotel will include structured parking below. It will be the first office building in downtown in almost 3 decades. This project is expected to generate millions in tax revenue for St. Louis City, while creating thousands of jobs for the surrounding residents.

Scottrade Center Renovations

Home of the St. Louis Blues, Scottrade Center went through some recent renovations as well. Before the Blues season started, the ice rink was completely demolished and reconstructed with extreme preciseness. The more obvious changes include a giant new scoreboard and ribbon display, as well as the new theatre box seats offering a glamorous way to enjoy the game. Locker rooms, bathrooms and a new flex space were also updated or added.

Railway Exchange Building

The 1914 Railway Exchange building, or old Macy’s Department Store, in downtown St. Louis may get some new life breathed into it by Hudson Holdings. This massive $250 Million project will create over 600 new apartments in downtown with the addition of retail and office space.

Chemical Building

A new owner has taken over the Chemical Building, located at 721 Olive, and is moving quickly to get bids on the project, since its neighboring building has begun work on a $65 Million hotel conversion.

Christian Peper Building

There is a St. Louis developer moving forward with plans to convert the riverfront Christian Peper building in Laclede’s Landing into a mixed use residential building for 49-51 residential units on upper levels with office and retail space in the lower levels.

Stay tuned for more St. Louis projects coming to construction.

All Insights

February 19, 2018

Anders Named a Top Workplace for Women by Women’s Foundation of Greater St. Louis

Anders has been named one of the top firms on the Women in the Workplace: Employment Scorecard conducted by the Women’s Foundation of Greater St. Louis. The Employment Scorecard recognizes companies for their efforts to recruit and retain women, promote women with policies and efforts to support a diverse population, demonstrate results with women in strong leadership roles and to demonstrate engagement with the community and local nonprofits that support women.

Anders is one of six companies in the St. Louis area to earn this special recognition.  Top companies will be honored at a Women’s Foundation of Greater St. Louis gala later on this year.

Read more about the six companies honored in the Riverfront Times.

All Insights

February 19, 2018

Experience the Power of Productivity, Collaboration and Mobility with Office 365

Technology has become a huge asset to running a business. Since technology is constantly improving, it becomes challenging to keep all software and hardware up to date. It can also be a headache to sift through all the available applications to find options that offer your employees the tools they need to be proficient at their jobs. If you are struggling with technology decisions and costs, Office 365 may be a good solution for your business.

What is Office 365?

Microsoft® Office 365 solutions offer cloud applications and productivity services. Office 365 provides businesses with applications for email, intranet, file storage and sharing, real-time document editing, video conferencing, instant messaging, reporting and more. Office 365 is essentially a one-stop-shop for applications geared towards employee collaboration and efficiency.

Save Effort and Money

Since Office 365 offers businesses a multitude of applications, there is no need to pay for licensing from several different software providers in order to get the same services. Instead, you will just pay a monthly subscription for Office 365 licensing. The licensing is based on the number of users, and that number can easily be changed on the fly. Also, gone are the days of paying for the latest and greatest software version since Office 365 comes with automatic updates.

In addition, if you have an on-premise Exchange server for email, you can move it to Office 365’s Exchange Online. Once email is migrated to Exchange Online, you no longer have to worry about the costs and time associated with the maintenance, support and necessary upgrades of an on-premise server. Also, with Exchange Online, you will receive the following:

  • Data security
  • Compliance with HIPAA and 9 other compliance standards
  • Protection against spam and viruses
  • Guaranteed 99.9% uptime

Access Anywhere

If an employee has access to the internet, then they will have access to Office 365. Remote employees will have the same access to Office 365 email, files and software applications as their in-office counterparts. Through Office 365, your employees are offered the freedom of mobility and the ability to perform their work from anywhere on any device.

Microsoft Teams – The Ultimate Collaboration Tool

Office 365 comes with numerous applications, and Microsoft Teams brings them all together in one place. Microsoft Teams, which was released in 2017, allows your employees to communicate and share their work instantly with each other in one central place. Employees can create teams to include all members working on a specific project. All members of the team will then be able to do the following:

  • Store and share files
  • Edit documents at the same time
  • Collaborate on presentations and reports
  • Communicate instantly through chats
  • Host online HD video, VoIP and dial-in audio meetings that are recorded and transcribed
  • View each other’s desktops
  • Easily search and find anything saved under the team
  • And much more!

Microsoft Teams is a valuable platform for both centralizing and organizing the tools employees need to be efficient and successful in their shared work.

Office 365 provides businesses and their employees with the power of productivity, collaboration and mobility. If you are interested in learning more about how an Office 365 solution can benefit your business, please contact an Anders advisor or learn more about Anders Technology Services.

Jason N. Gotway, VSP5, VMTSP, VCP550, VCP6 was a contributor to this post.

All Insights

February 14, 2018

Anders Startup Client Spotlight on daph. LLC

Each month, we offer our startup clients the opportunity to share their story and showcase their business in our Startup Newsletter. This month’s featured emerging company is the handmade leather designer, Daphne Benzaquen and her company, daph. LLC.

Name and company

Daphne Benzaquen of daph. LLC

When did you start your business?

I’ve always wanted to be my own boss and own something that was mine. This desire was only further fueled during my MBA journey at Olin Business School, while taking an entrepreneurship class. In December 2016 I started designing the original collection of backpacks, totes, clutches and purses. Being a proud Peruvian I always strived to advocate and showcase the high quality and durability of Peru’s leather craftsmanship and resources, with designs in hand I ventured to meet with multiple manufacturers in Arequipa, Peru in January of 2017. After many meetings, lessons and samples I received my first collection and launched my website in December of 2017. I also share stories and lessons I learned along my entrepreneurial journey on my blog.

What inspired you to start your business?

It started with a practical need. I needed a functional, fashionable backpack that I could use for graduate school. About a year ago I embarked on an adventure that led to a self-taught crash course in designing leather goods, meetings with many leather makers across Peru and a website that I designed from scratch. It was a struggle at times, but I am so proud of the final product and it was well worth the effort and patience.

What city are you based in?

St. Louis

What is your product or service?

Durable, authentic, polished and handmade leather goods for men and women.

What sets your product or service apart from the competition?

My products are designed in St. Louis, Missouri, where I created our signature pattern, which is found on the majority of our products, and hand crafted in the mountains of Arequipa, Peru. I was born in Peru and always wanted to showcase my unique background. Arequipa is known for its quality leather, access to alpaca fur and craftsmanship so it was the best place to look for my crafting partner. Each product is delicately crafted to my design specifications with high quality leather. One individual product can take over a week to make. Since resources can be scarce, there is a limited quantity of the products I design, so grab them while they last!

What is the best business advice you ever received?

Never be afraid to ask. Whether it be asking a manufacturer for a decreased minimum order, asking apps for a free trial or reaching out to future mentors for a meeting, there is never any harm in asking people for favors, their time and products. In most cases, others are more than happy to help you in any way they can and teach you something along the way. I would not be where I am now without asking for help, advice and favors.

Is there anything else you would like to share about your business?

A portion of every sale is donated to a nonprofit that helps the people of Peru. This quarter we are donating to the Peruvian American Medical Society Auxiliary Fund which is helping two special charities.

Casa Emanuel:  When someone reports an incident of domestic violence in Tarapoto, Peru, the policeman may ask the caller, “Is there blood?” Unless there is blood, the abuse is not considered serious enough to merit a response! This is why we felt it was important to build a shelter for women in this growing city.

Rayo de Sol: Rayo de Sol is an association to help children in need in Peru that is supported by French students. The association builds and runs a children’s shelter in Tarapoto, Peru which is financed by a local French bakery and donations which are helping the construction of the shelter.

What is your favorite thing to do outside of work?

I love cooking, blogging and pilates and yoga. Some of my best ideas for designs come from meditation during yoga!

If people want to learn more about your startup, where should they go?

Visit www.shopdaph.com to subscribe to our newsletter and follow us on Instagram and Facebook @shopdaph.

 

 

 

 

 


If you would like your startup company to be considered for an Anders Startup Client Spotlight, please complete our questionnaire.

All Insights

February 13, 2018

Accounting 101 for Startups: Double Entry Accounting

Basic knowledge of your startup’s financial statements and accounting processes can help business owners understand their company’s financial status and outlook. The first blog post in our Accounting 101 for Startups series focused on the Chart of Accounts. Now, we’re diving into debits and credits in double entry accounting.

You’ve probably heard the accounting phrase, “debits need to equal credits”. Debits and credits equaling helps keep the accounting equation in balance and your financial statements accurate. Double entry accounting means for every debit, there must be an equal credit.

What is double entry accounting?

Double entry accounting is making journal entries that affect at least two accounts, and have balancing debit and credit amounts. There can be multiple accounts in journal entries, but the total amount of debits must equal the total credits. Now that we know debits and credits need to equal in a journal entry, it might be helpful to know what debits and credits are.

What is a debit and a credit?

A debit will always be on the left side of an account, and a credit will always be on the right side of an account. Below is an illustration of a T-account:

 

 

 

 

 

Regardless of the type of account you’re using, the debit and credit sides on a T account do not change. What changes in relation to debits and credits for different accounts is what they do to the account balance. For example, debiting certain accounts increases them, while debiting others decreases them. It depends on the type of account as to what a debit or credit will do to it.

How do I know the effect of a debit or credit on an account?

Essentially, the Balance Sheet accounts, such as Assets, Liabilities, Owner’s Equity and Income Statement accounts, including Revenue, Expenses, Gains, Losses are all affected differently by a debit or credit. Refer to our Accounting 101 blog post on Chart of Accounts for common accounts for each Balance Sheet and Income Statement item.

Assets, Expenses, and Losses will always increase with a debit balance and decrease with a credit balance. To illustrate this concept, we will use asset accounts in an example to show the effects of debits and credits.

Example 1:  Customer A paid $100 towards an outstanding invoice. Cash goes up, Accounts Receivable goes down.

The journal entry would be:

Debit:   Cash    $100

Credit:  Accounts Receivable     $100

Using T-accounts:

 

 

By debiting our asset account, Cash, you can see we increased the balance. Whereas by crediting our accounts receivable, which is also an asset, we decreased the balance.  All other asset, expense and loss accounts work the same way, they increase with debits and decrease with credits.

Even though this is a simple example with only two accounts, it demonstrates the important idea that no matter how many accounts are used or what accounts are used, the debits and credits in the entry should always balance.

Liabilities, Revenues, and Owner’s Equity are the exact opposite. A debit to any of these accounts decreases the account, and a credit to these accounts increases the account. We will demonstrate this concept using the Revenue account, Sales Revenue.

Example 2: Sold merchandise to Customer B for $20,000, but only received $12,000 in cash. The rest will be paid at a later date.

The journal entry would be:

Debit:   Cash                                 $12,000

Debit:   Accounts Receivable      $8,000

Credit:  Sales Revenue                      $20,000

Using T-accounts:

 

If we look at our Revenue account in this example, Sales Revenue, it is being increased for the total amount of the sale to Vendor B by crediting the account. Our other accounts utilized in this example, Cash and Accounts Receivable, are asset accounts. As we mentioned earlier, both are increased with a debit. Cash is debited for the amount actually received from Customer B, and Accounts Receivable is debited for the amount Customer B will pay at a later date.

This example shows us, even if we are using multiple accounts, the total debits must equal the total credits. If we add up our debits to both Cash and Accounts Receivable, we get $20,000 which is also the amount we credited to our Sales account; therefore, we are still in balance. This is essential in every journal entry made by a company.

Accounting software, such as QuickBooks, will figure out the double entry accounting for you.  For example, writing a check for office supplies. You know the bank account balance went down, and your office supplies expense just went up, but you don’t need to know which account is being debited and which is being credited.  Although accounting software takes care of the journal entry, it is still important to have a basic understanding of debits, credits, and their relationship to the chart of accounts.  If you have any questions about double entry accounting, or would like more information, please contact an Anders Advisor.

All Insights

February 6, 2018

Outsmart Hackers by Implementing a New Password Complexity Standard

When it comes to protecting confidential information, businesses are often only as strong as their weakest password. One weak password can lead to a data breach resulting in loss of reputation, revenue or even loss of an entire business. With such high stakes, it’s important to enforce a strong password policy to prevent hackers.

How Hackers Guess Passwords

Today’s hackers use software that guesses user passwords by rapidly running through an enormous amount of password combinations per second. This hacking software is designed to use two techniques to guess passwords: dictionary and brute-force.

  • Dictionary Technique: Uses a list of preset common passwords to guess
  • Brute-Force Technique: Systematically runs through letter, number and special character combinations to guess

Here are some examples of passwords that are no match for hacking software.

Weak Password Examples:

  • The use of “password” in any way – p@ssw0rd; !Password123
  • Common sequences of letters/numbers – 12345; abcde; 1122333
  • Keys that are near each other – asdf123; !qwerty
  • Single words with common special characters – C@rdinal1; c0rv3tt3!

New Complex Password Policy Standard

To combat current password guessing software, a new password policy has been adopted by IT security professionals. The new password policy standard emphasizes password length and complexity. A password that meets the following new guidelines will generally take many years for hacking software to guess, and thus be a stronger password.

Longer Passwords are Stronger Passwords

  • Use a minimum of 12 characters
  • Use a phrase that you can picture and easily remember

Complexity is Still Important

  • Use any character, including spaces
  • Mix up special characters throughout your phrase

Strong Password Examples:

  • Golf !s theB3st Sp0rT
  • Irel@nd NextYear 07.08.2018

Password Security Best Practices

In addition to creating a long, complex password, the following additional security practices should also be put in place.

Mandatory Password Changes

Since passwords that meet the new policy are much stronger, they only need to be changed two times a year. That means fewer passwords for employees to create and remember! Even though these passwords are stronger, they may still fall into the hands of hackers through phishing schemes or other methods. By making employee password changes mandatory twice a year, you are adding another safety net against hackers.

Account Lockouts

By locking accounts after a certain number of failed password attempts, account lockouts stop brute-force hacker attacks in their tracks. Once an account is locked, it can only be unlocked by a designated administrator.

Implementing the new complex password policy at your company is a positive step towards protecting your sensitive business information. However, you need make sure that this policy is followed by all employees for it to be effective. If you have questions regarding how to successfully implement and manage the complex password policy at your company, Anders team of technology advisors are here to help. You may contact Anders to learn more about the new complex password policy, password best practices, other recommended security best practices and  Anders Technology Services.

All Insights

Keep up with Anders

Want to keep up with all the latest insights from Anders? Subscribe and receive the information that matters to you.

  • This field is for validation purposes and should be left unchanged.