Author: Stephen Huck

Internal fraud can happen to anyone; no business is immune to it. Companies in the US lose over $500 million annually due to internal fraud. Here are some signs of internal fraud and responses.

Unjustified Transactions

Any unexplained and unjustified changes in bookkeeping records are a definite warning sign of internal fraud. If there is a decrease in revenue despite continuous payments from the business bank account or if there are various pending payments for long periods without any justified reason, then there is most likely something suspicious happening. Also, if there is an unexplained increase in expenses and a sudden decrease in profits, it means that money is draining out of the company to a place where it is not supposed to go.

The Over-Efficient Workaholics

An accountant who is a fraudster will go to any extent to hide his or her crime. They often want to work off-hours when everyone has gone home. Another sign is that they refuse to go on leave or use any vacation time. They often try to take work home. All of these activities are red flags and need to be addressed. Keep an eye on such workaholics. Unfortunately, there may be an underlying reason for working such odd and extreme hours.

Unexplained Satisfaction

Fraudsters try to hide their working documents and processes from managers and others. If any manager or other employee tries to get involved in their work, they become offended. They give unsatisfactory explanations and answers on any fault.

They are overprotective. They work alone and don’t like any involvement or interference. Records maintained by them become inaccessible and untouchable to others. When asked questions, they become strangely defensive. They know that the records will expose their crime, and their answers will be suspicious and unrealistic.

Financial Stress

If an accountant is facing any financial stress in their life, there have been cases when they plan internal fraud to fulfill their needs. Any unexpected financial loss such as divorce, mortgage, or debt acts as the trigger for internal fraud. Know your employee by taking time for small discussions with them about their current situation. By doing this, you can detect any sudden change in their behavior and activities.

How to Respond to Internal Fraud?

A business owner should know how to respond to internal fraud. Whether the one committing the fraud should go through an internal investigation or be handed over to law enforcement should be a decision that you are prepared to make.

A forensic accountant should be consulted for an expert opinion.  They will investigate and interpret your financial information. They will analyze the amount of loss due to fraud, collect all shreds of evidence, preserve them, and prepare a summary of the lawsuit. They will suggest a policy to prevent fraud in the future.

Termination is the minimum consequence of internal fraud cases. Along with termination, other penalties enforced by a lawsuit are necessary to make it an example that fraud will not be tolerated in your company.

How to Investigate

An internal investigation should be exhibited in such a way that your employees, partners, public, and donors trust you and your investigation. No question on the credibility of your investigation should be raised. Hire experienced fraud investigators to ensure that your investigations are handled according to law and be sure that there is no violation of legalities.

A prompt decision needs to be made by the business owner, internal audit, board of directors, and forensic accountant alone or in combination. The decision-making authorities should address the size of the fraud, the target of the investigation, how to recover the loss, and other risk factors.

Interview all of the parties, i.e., vendors, customers, and employees. Review all relevant records. Preserve the evidence as early as possible because documentary evidence is key for investigations. Forensic accountants and IT personnel should be hired to do investigations in the best way to ensure that you handle them thoroughly.

Conclusion

Internal fraud should be investigated in detail to produce evidence for legal prosecution.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

A business credit score reflects the ability of a business to pay back a loan. It is rated on a 0 to 100 scale. 

Calculating Your Business Credit Score

Your business credit score is calculated by using the statistical algorithm, designed to measure several traits of your company and financial history.

Among these factors are:

• Credit use ratio
• Payment history
• Length of credit history
• Unpaid debts
• Public records, such as bankruptcies, liens, and judgments
• Business size
• Business risk

Some of the factors are similar to calculating a personal credit score. However, many factors are different in building business credit scores.

How to Build and Improve Business Credit Scores 

1. Get a business credit card or line of credit

Of course, the first step in building a business credit score is to get a business credit card. You can also get a line of credit for your business. Be sure that you are getting a business credit card for your business financing, not a personal credit card for your individual finances.

2. Separate your business and personal expenses

This is not only important for avoiding accounting mistakes. This is also essential in building credit scores for your business.

3. Select your supplier and lenders with an eye on your business credit

Many small businesses have incomplete business credit accounts because their dealers and money lenders don’t report costs to the business credit unions.

4. Pay your bills on time or, better yet, in advance

If you want to make sure that your business credit score is high, then you must pay on time. A delay in payments ruins your business credit, and a delay in payments from your company affects the cash flow of other businesses. This is the same as when your clients do not pay you on time, and it affects the cash flow process of your small business.

Much of your business rating depends on how you pay your suppliers and other contractors within an approved time frame. If you pay in advance or on the spot, this practice will make your business credit even better. Your suppliers and contractors will further put remarks like “prompt,” “pays early,” etc. 

The reason for such nice additional remarks is that every business needs a prompt cash flow for its running. Other companies might also be going through cash flow problems. Early payments or payments done on time significantly reduce cash flow problems.

Your business credit score is used to measure the lending and credit risk linked to your company. A good business credit score shows that your company can manage debts and finances efficiently.

5. Utilize credit, but not too much

Your business should utilize the credit score it has, but make sure not to overuse it. If you continue utilizing your business credit score for your business operations, it will be beneficial. You will keep building and utilizing some of your credit scores. It is just like taking a loan and paying it back promptly. It builds trust in your business’s ability and financial stability. But, consuming all of the credit score or too much of the score means your company is not financially stable and is relying on the credit score it builds over time.

6. Fix errors on your business credit score report

If there are errors in your consumer credit report, there is a fixed process for disputing them. However, for business credit report errors, there is a different process everywhere. Every bureau has its procedure for disputing business credit errors. You can submit disputes electronically.

Conclusion

Using a business credit card or line of credit helps to build your business credit score. You have to build and keep improving your business credit score by making on-time payments, using the business credit card, and continue utilizing some of its scores to your benefit. All of these steps build a better and more trusted image 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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

Business owners frequently grapple with the unsettling reality of fraud and theft, predominantly instigated by their employees. This risk has significantly escalated with the rapid advancement of technology and the dynamic nature of the global marketplace. According to extensive research, organizations typically incur an alarming average loss of 5% due to fraud each year, with internal employees accounting for a staggering 85% of serious fraud cases. Given these troubling statistics, it becomes imperative for organizations to devise and implement comprehensive, multi-layered fraud prevention strategies. Below, we outline effective plans and policies designed to combat fraud and employee theft within your business.

Cultivating a Strong Corporate Culture

A well-defined corporate culture serves as the backbone of an organization, outlining the procedures and policies that dictate employee conduct. Establishing a transparent organizational structure that specifies reporting systems, clarifies the roles of accountable individuals, delineates the segregation of duties, and defines job responsibilities and regulations is essential. Additionally, employing the right individuals is crucial; thorough background checks on applicants’ past employment and educational history can help ensure that trustworthy candidates are onboarded.

Creating an Anti-Fraud Policy

An effective anti-fraud policy is not just a document but a foundational element that articulates the definitions of fraud and outlines its prevention and detection procedures. This policy should be clearly communicated to all employees, emphasizing a zero-tolerance approach towards any form of deceit. Employees must also understand the steps they should take if they suspect fraudulent activities within the organization.

Safeguarding Physical Assets from Theft

Implementing random and surprise audits

Alongside scheduled annual and quarterly audits, introducing unannounced audits can significantly reduce the likelihood of employee theft and fraud. The unpredictability of these audits serves as a powerful deterrent, encouraging employees to adhere to ethical conduct.

Segregating duties for inventory management

Segregating the responsibilities of inventory management staff is vital to fortifying against potential fraud. By ensuring that one individual issues purchase orders while a different person receives the stock, you create a system of checks and balances that minimizes opportunities for deceit.

Installing security cameras

The strategic placement of CCTV cameras in inventory storage areas can play a critical role in monitoring employee behavior and deterring theft. The mere presence of surveillance can discourage wrongdoing.

Restricting access to inventory areas

Limiting access to inventory storage areas to authorized personnel secures valuable assets and promotes accountability. These areas should be securely locked after hours, with keys distributed solely to designated individuals.

Combating Check Tampering

Securing blank checks

Blank checks should always be secured and locked away until they are needed for bookkeeping purposes. This precaution helps prevent unauthorized use.

Regularly reviewing bank statements

Monthly reviews of bank statements represent a proactive strategy to identify potential fraud, especially concerning tampered checks. Anomalies in transaction records can often reveal foul play.

Preventing Expense Reimbursement Schemes

Mandating receipts for expense claims

Employees should be required to submit legitimate receipts for any expenses they wish to claim for reimbursement. This practice ensures accountability and traceability.

Establishing a clear expense reimbursement policy

A documented policy detailing reimbursable expenses is essential. This policy should clearly outline covered expenses, and each employee must receive a copy to ensure understanding.

Conducting comparisons of expense reports

To enhance oversight, designate different employees to review and compare expense reports submitted by their peers. This collaborative approach helps confirm the legitimacy of claimed expenses.

Preventing Billing Schemes

Maintaining an approved vendor list

Developing a list of approved vendors is critical in shielding the organization from fraudulent billing. Conduct thorough research to verify the legitimacy of each vendor to avoid inadvertently engaging with fraudulent companies.

Establishing a price list for vendors

Vendors should provide a list of approved prices for their goods or services. This measure helps protect the organization from overpayment and ensures fair pricing.

Requiring signed receipts for transactions

To facilitate transparency, checks should only be signed when accompanied by a signed receipt for the corresponding product. This practice encourages accountability and thorough record-keeping.

Protecting Cash from Theft

Requiring management approval for sensitive transactions

All sensitive financial transactions should be conducted only with explicit approval from a manager. This oversight helps safeguard against unauthorized access to funds.

Receiving monthly account statements

Frequent updates and reviews of customer accounts allow for the timely detection of discrepancies or fraudulent activities within the cash flow.

Implementing duty rotation practices

Regularly rotating employee duties and encouraging annual leave can deter theft. These actions create an environment where employees are less likely to engage in dishonest behavior due to the increased risk of detection.

Utilizing bank lockers for cash management

Reduce employee access to cash handling to further mitigate the risk of cash theft. Payments should be directed into the company’s bank account, minimizing employees’ physical handling of cash.

Conducting surprise cash audits

Regular, unannounced counts of cash against receipts can quickly uncover discrepancies and illuminate any potential theft.

Installing video surveillance in cash areas

Video cameras located in sensitive cash handling areas can serve as both a deterrent and a monitoring tool, helping to prevent theft.

Conclusion

Establishing robust fraud prevention measures is vital for your business’s security and integrity. By implementing and adhering to the plans and policies outlined above, you can create a vigilant environment that significantly reduces the risk of employee theft and fosters a culture of 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.

Our company is growing and evolving on a day-to-day basis. Our primary purpose is the standardization of the full-charge bookkeeping cycle, which has moving parts that vary by industry and client needs.  Bookkeeping has multiple options; the challenge is to define best practices and choose the one best for the company. At first, we added to the process manual for each role within the company. We made sure the processes had accountability points where a person outside of the process would be aware if it weren’t completed or proper. Our manuals became robust, and there was no way to ensure that the staff members in a given role had a working understanding of all the material. We applied these tools for knowledge management, and our knowledge share is now more efficient and exciting than ever:

Training Videos – We created a series of training videos to help orient new staff members or those entering into a new role within the company. They are supported by outlines on which we require our trainees to make notes and give them to their supervisor. This does the following: we are reaching the visual and written learners, we are ensuring that videos are being watched all the way through, and we are mining information about the content and the trainee. If we keep seeing the same questions pop up on those outline notes about a given subject, we know we need to improve our training in that area. If we see inconsistent or off-subject notes, we know that the trainee cannot learn this way, be meticulous, or stay on point – all indications that the role may not be a good fit for them.

Testing & Continuing Education – After they have watched all the videos and taken one long read through the process manual that applies to their role, we give them an open-book test. All the answers are searchable within the manual, and this practice helps us to get their head into the manual, using it as a reference guide and bringing attention to the details of critical processes. Since our process manuals are continually evolving, continuing internal education is critical. Our staff answers a quick set of continuing education questions every month that set them up for success in their roles. Some processes occur once a year, so the continuing education questions are a great way to refresh their knowledge about how to handle seasonal tasks properly. Of course, we also include questions about the new or changed processes so they come to attention. This has been effective in reducing requests for support in tasks that are already outlined in the manual, increasing our staff efficiency.

Management Brainstorming – We have five levels of accountability within our company: Data Entry, Bookkeepers, Controllers, Operations, and Executive staff. At all levels, we have talented, experienced, and highly educated people who love the company and want to see us become more valuable, more efficient, and more effective in the market we serve. I believe that executive staff who do not recognize the talent of their team and instead ‘dictate from on high’ miss out on great feedback and have a hard time creating the passion that fuels collaboration and personal responsibility. If a staff member is always carrying out someone else’s wishes and doesn’t have the opportunity and encouragement to share their thoughts and ideas, they won’t be excited about their workplace. We offer a forum for brainstorming where our management-level team members air concerns, discuss potential solutions, work through processes that aren’t working, and discover untapped opportunities. Our non-management staff is recognized when they bring a good idea to the attention of management, and they get a bonus if implemented in part or whole.

These strategies have drastically improved knowledge management within our small business environment, and they are affordable – we were able to create all our training and tests in-house by the people who are closest to work. It doesn’t have to be complicated or expensive to be effective. 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.

As a company that has grown into a nationwide presence over the past decade, we at Complete Controller take pride in being the first ones to acknowledge the benefits of a virtual workplace. Our team has never been restricted to cubicles, time-consuming commutes, or structured 9-5 workday schedules. Our entirely cloud-based workplace has proven to be highly effective. Here are some of the benefits of a virtual workforce, and what you should look out for:

Keep Costs Down

As accountants, we are always mindful of our expenses. One of the most significant benefits of having a virtual workforce is the considerable savings on leasehold improvements, rent, and overhead expenses. By not having a physical office, we can direct those resources to other critical areas of our business. Additionally, having a virtual team allows us to access a wider pool of talented professionals, regardless of their location. This way, we can hire the best fit for the job, regardless of their proximity to our office. Overall, the freedom and flexibility that comes with having a virtual workforce are highly advantageous for our business.

Keep Morale Up

By keeping it virtual, we are naturally more concerned with work product than work time. We already know how long it takes to do the work, so we can determine if a staff member is struggling and give them the training or support they may need to get up to speed. If their work product is excellent, they can have a job for life, no matter what life changes may occur.

Hire Smarter

A virtual workforce allows us to select from an entire nation of talent. This virtualization of the workforce breaks open the talent pool and brings potential employees from all over the world. Our recruits are hired solely on their merit and abilities, so we do not care about how they dress, what ethnicity they are, or where they live. Since we are dealing with people’s money and sensitive documents, we chose to hire within the U.S., but other types of businesses can draw from an even larger talent pool.

Knowledge Share in Real-Time

We are comfortable conversing and collaborating via email and have learned to clean and extract written knowledge and make it available on the group level. This allows for the quick evolution of the process and the continuous knowledge to be shared within the roles in our organization. To support the quick identification of data, every team member should understand the organization’s mission and core values. The main objective is to be able to share knowledge and best practices in real time, which can positively influence every team member’s workflow.

Build a Culture

One of our values is the promotion of “Autonomy– Independence without Isolation.” By facilitating collaboration and knowledge shared with each member of our team, we are empowered to make smart decisions. We encourage exchange between team members on a technical level as well as a social level. Although some employers may view it as a waste of valuable time and resources, a great deal of bonding occurs during ‘water cooler’ or ‘coffee break’ time together. Through these virtual interactions, loyalty is developed, and our team is greatly enhanced by glimpsing into one another’s lives beyond the workplace.

Conclusion

Entrepreneurs, small business owners, and larger corporations continue to move in the direction of total office virtualization. It is the smart choice for most service businesses, as the business ‘community’ continues to become a web of interdependent experts that support each business size and type. Businesses today have unprecedented access to expertise outside of their geographic area at a lower cost than ever before due to quick access via the Internet. You can be assured that they will continue to move away from choosing the local in-office standard and begin to move towards a virtual environment. This virtualization opens a world of possibilities for sales, expertise, and employee talent pool. 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.

I am the CEO of a small business, and learning the art of delegation has proven to be the most critical lesson to my company’s growth, workplace satisfaction, and work product standardization.

What was the best advice you’ve gotten about delegating work? I was mentored by an executive at the Coca-Cola corporation who taught me that, to grow my business into a national brand, I must create a reliable and consistent experience for the end-user. Why are customers loyal to Coke? They are loyal because they like it. Naturally, they expect it to be the same every time they buy it. They would be disappointed if it weren’t. I had to handle my brand the same way. But how was I to grow my small bookkeeping business with three bookkeepers and 30 clients into a national brand that delivered a reliable product and service? By delegating the work to the team and making it easy to duplicate.

What made it so valuable? When I fully adopted her way of thinking, it made my refusal of non-conforming clients easy. Instead of trying to change our processes to meet their needs, I was able to tell them that I did not believe we would be able to meet their needs. Thereby eliminating any clients that were looking to run the show themselves, deviate from our established standards for quality, or make demands that caused us to be inefficient. That left me with a client base that valued our service and was pleased to work with us. It also helped me to define for our sales team what we do and what product our clients can expect when they engage us. This training on the sales side helped us to avoid unfit clients in the future. Now, we were ready to grow….but how was I going to teach all those Bookkeepers how I wanted the work done? I couldn’t do it one at a time, so I created precise instruction sets that were combined to become our operating manuals for the positions within our organization.

How would you rate your ability to delegate? Why? My ability to delegate is excellent. I think a major hurdle to delegation is the idea that ‘I can do it better and faster, so I may as well get it done.’ Of course, you can, but that is a self-defeating and task-oriented mentality. What happens when that same situation arises again – as surely it will repeat itself if your department or company is growing – and this time you don’t have the bandwidth to get it done? Now you have become the problem – not the solution. I always suggest my managers do everything at least once so they can understand the concepts and steps involved in any given task. Once they know it, they need to create an instruction set and delegate the task. When we delegate, we either record it in a manual or instruction set or record the training in video format, which can be shared with anyone who needs to do that task in the future. Yes, this takes a lot more time than doing it yourself, but it is much better for the team and the company.

What do you wish you could improve about your delegation skills? I need to be careful to express the ‘why’ as well as the ‘how’ when I delegate a task. I find that if I explain the purpose behind the task, team members will carry the torch and be more studious about quality and timeliness. They take ownership of it, and often, they will improve upon the instructions to make the task more efficient or find overlap benefits in other areas.

What do you have trouble with? What have the consequences been? Since ours is a small business, I have the propensity to wear all the hats. I want to know what’s going on in every area, and I want to learn about each facet before I decide who is best for the job. The cure for this is to remember that I have qualified, intelligent, dedicated staff members on the team, and they want what’s best for the company as well. When I resist the urge to be involved and instead delegate the learning curve and team selection decision to someone else, the flow begins again, and we can move forward on more fronts than ever before.

How do you choose the right person to whom to delegate a task? One of the keys to delegation is the creation of Quality Control checks that allow you to decide if the work is completed properly and on time. Good, strong QC checks will help you avoid a culture of micro-management. I will typically choose the person who can do the task most efficiently, and then I will select another person to whom they have to be accountable. The accountability partner receives data from the task performer, and the sign that something is amiss is the absence of communication or data. In this passive role, that person can oversee a multitude of tasks and offer support when and where needed to get something back on track.

Once you build the processes and QC stops for each position, delegation is not a problem, and the future growth of a department or business is reliant on adding new clients and new team members.

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.

Keeping yourself informed about your credit score will help you stay one step ahead of creditors and avoid errors that could hurt you later. It’s easy to do, and often it’s free!
Keeping on top of your credit score can prevent identity theft or being denied loans. Checking your scores regularly will help you stay informed and on top of any discrepancies so you will never get hit with any credit surprises.

Keeping Track of Your Credit

Your credit score is an important tool. It will be used your whole life to determine your eligibility for each of the financial decisions you make. Knowing where this number falls on the credit scale will make sure that you are positively portrayed to creditors. When your credit score is correct, you can optimize the chances of qualifying for whatever loan you might apply for. If you don’t know the status of your score, you might be missing out on the advantages that come with a high credit score.

Keeping track of your score and fixing errors that may appear is the best way you can detect issues that may have been missed by the credit bureau. You can also fix larger issues like identity theft earlier, which can be crucial under those circumstances. When accessing this information is free, why not put yourself one step ahead in the game of credit?

Let us discuss what resources we can use to access our credit score, how often is often enough to check that everything is up to date, and how to catch issues such as identity theft before they develop.

Easy and Free Resources to Calculate Your Credit Score

Checking your credit score is easier than you might think. All you have to do is Google free credit reports. You can also contact any of the three credit bureaus to get information on your credit. You can check your score for free once a year by going through Experian, Equifax, or TransUnion. Most sites will require some basic information, name, social security number, etc. With that information, they can look up your credit score in detail. These sites will provide you with a number between 300-800 represented on a scale that indicates if you are in a good or bad credit range. They will often also provide a summary of what actions have affected your score. This way, you can adjust behaviors you didn’t know were negatively affecting you and catch any errors that should be removed from your history.

How Often to Check My Score

Making sure that everything looks right and correcting any discrepancies is manageable if you don’t let problems get out of hand. Check your credit score at least once a year. This way, you have an idea of where you sit on the scale. Also, check your score a couple of months before you plan to apply for a loan or a credit card; this way, you have time to correct any issues. On free sites, you can check your score as often as you want without any negative consequences. Most credit score websites will offer free monitoring and will alert you to issues or goals.

Besides the obvious advantages you will have when you are looking to use your credit to get loans or other credit-related benefits, knowing your score gives you control. It can also be a strong motivator to stay on top of your finances and to live within your means.  A good relationship between you and your credit score will mean financial and identity security for you.

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.

Budgeting and keeping track of your finances can seem impossible.  Using a spreadsheet to create a budget worksheet will make budgeting easy! No matter what your financial situation may be, a budget worksheet will be useful to you. Making a budget can seem like a difficult task when you look at your paychecks and bills and wonder if it will even be possible to get through the month. It may be hard to conceive what your potential budget will even look like. You can feel like the numbers will bury you in an unmanageable amount of stress or debt. You do not have to wait for more stability before you face the truth. Having a solid plan will relieve the stress and help you avoid debt.  Creating a budget worksheet is fast and easy, and you may already have access to all the tools you need right in Microsoft Excel. If you do not have Excel, there are identical spreadsheet programs available for free online. Whether you spend more than you make or make more than you need to spend, knowing where the money you earn is going each month is vital. Focusing on your spending habits is crucial when thinking about your budget. Also, it is important to know where to direct the money you have left over.

Making a Budget Using a Spreadsheet

When setting up your spreadsheet, you will have two categories: income and expenses. Both will have three columns: listed sources of income or expenses under the designated category, projected earnings or costs, and actual earnings or costs.

When making a budget, it is important to remember that you will have estimated budget amounts that may differ from your actual expenses. If income or expenses are not a set amount, an estimation will become necessary when setting up the budget columns of the spreadsheet. The suggestion would be to round up to the nearest ten on expenses and round down to the nearest ten for the income estimate. Even if your income or expenses are a fixed amount, this rounding will ensure you do not spend more than your means and also that you have adequate coverage of your expenses.

Under income, in the first column, you will add all your sources of income. This could include your paycheck, cashback on credit cards, financial aid, or other allowances, each of them in their own row. In the next column, “Projected Income”, you will add what you expect to earn in each of these categories. In the last column, “Actual Income”, you will enter what and when you received your respective earnings.

Under expenses, in the first column, you will add all your expenses in the same way you listed your income.  You will also add the projected cost of each item and the actual cost after receiving the bill. You can list your expenses two ways, by largest to smallest or by due date. This will be dependent on what works best for you. 

Most spreadsheet programs will total each column automatically. These totals can now be compared to determine whether your income exceeds your expenses or your expenses exceed your income. Knowing this will help you make smarter spending and saving decisions.  If you have a surplus at the end of the month, you can put it in savings, spend it on items you desire, or take a vacation. If you have spent more than you make, you can use the spreadsheet to identify expenses that can be reduced or cut out.

No matter what your financial situation may be, making and keeping a budget should be a priority. This type of personal bookkeeping can make a difference in your bottom line while also positively affecting your future financial health. Now that you can see that creating a budget worksheet is easy, you can view it as a worthy tool to help control your finances and live stress-free.

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-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure 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.

Your credit score is incredibly important when it comes to your finances. It is vital to know what affects your credit and to what extent. Once you understand what is adversely affecting your score, you can formulate a plan to eliminate the culprit of the lower score. These issues could involve late payments or defaults on loans, numerous hard inquiries about your credit score, or mistakes that should not be on your credit report. Once you know what is affecting your score negatively, planning to reverse and avoid these issues is relatively simple.

We have all seen commercials emphasizing the need to check our credit scores. Individuals who are on top of their scores have confidence and can improve their buying power and stay on track for financial freedom. Those who have let their score go unchecked may have problems lying beneath the surface that, if not attended to, can cause financial hardship.

These dramatic representations of good credit vs. bad credit are a reality. You may not find yourself in those ridiculous situations depicted in the ads, but you can find yourself unable to buy a home or a car. Even worse, you can make those purchases but with unbelievably high interest rates. Despite ads and would-be creditors stressing the importance of good credit, most people don’t give it any serious thought.

In this article, we are going to discuss three factors that hurt your credit score so that you can watch out for these financial behaviors and start improving your score.

1. Making late payments/No payments

Making late payments on your credit cards, loans, or any credit reporting accounts makes up 35% of credit scores. The simple solution is to make your payments on time, every time. One or two late payments add up quickly. You don’t want to see your credit score drop drastically because you can’t make payments on time.

Making no payments will have collections knocking at your door. This is the worst-case scenario for your credit score. Avoid this disaster by making sure you are aware of the monthly payments you owe.  

2. Maxing out your credit cards

Idealistically, you should be using no more than 20-30% of your available credit. Keeping your credit cards maxed out at all times looks terrible to lenders and ultimately drops your credit score. Emergencies happen, and that’s why we have credit cards, but in case of emergency, make sure you make those payments on time and pay more than the minimum payment. That way, you won’t get stuck in debt or only pay the interest.

3. Applying for multiple credit cards over a short length of time

When a lender sees that you have opened up several new credit cards, this sends up a red flag. It’s pretty simple; creditors assume the more credit cards you’ve opened up, the more you’ll be buying things on credit. To them, this possibility means that you may not have the finances to pay them back. This is most important when applying for mortgages.

Places to Check Your Credit Score

Free and fee-required websites that do credit checks are out there. The top two we recommend are FICO and Credit Karma. Both of these websites offer a surplus of information when it comes to your personal credit. You will find everything you need to know about your credit score. You will also find a lot of information about how to improve your credit and refinancing options. Once you’ve taken the leap to check your credit score on one of these trusted sites, take some time to familiarize yourself with the website and all they offer.

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.