Asset Management and Liability Tips

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How much insurance do I need?

Make sure your suppliers are prepared!!

Use suppliers who have business continuity plans. Using suppliers with their own contingency plans makes you less vulnerable when disaster strikes. Especially if you use just in time delivery for your inventory. Have a supplier agreement for disruptions. Remember - 43% of businesses never reopen after a disaster (often due to impacts from a loss of inventory sources, distributors or communication systems).

   
How can I find information about a specific company?

Researching companies

If you need to find out about a specific company (ie: is it a legitimate operation or if they´ve had many complaints filed against them, I suggest that you contact your local Better Business Bureau. The BBB can be found online at http://www.betterbusinessbureau.com/ and you may also want to check the local state BBB site which you should be able to link from the main site. Be aware that the BBB may only have records of problems that individuals have filed. Just because there are no "bad" reports on a company does not necessarily mean it is in the clear. Also, the company name you have referenced may be a DBA (which is not necessarily the actual "business name" on file.

   
How do I protect my business in case of disaster?

Embezzlement in the workplace

Here are some warning signs that embezzlement might be occurring:
* Unusual bad-debt write-offs could be covering up a fraudulent scheme.
* Profit declines and increases in expenses could be a sign that cash is being siphoned off illegitimately.
* A decline or unusually small increase in sales could mean that sales are not being recorded.
* Bounced business checks could indicate that funds are being siphoned out of your bank account.
* An increase in overall sales returns might mean a concealment of A/R payments.
* Inventory shortages could indicate fictitious purchases, unrecorded sales, or employee pilferage.
* Slow collections can hide embezzlement.

   
How can I prevent business losses?

Security

Security- Security is a broad issue, and you may choose to keep the focus of your policy narrow, or you may choose to address many different aspects of security in your policy. Some topics that you might include are:
*guards and security
*your security program/committee
*areas of limited access
*restrictions on visitors
*statements regarding the removal of company property
*escort services to cars, if you provide it

   
How much insurance do I need?

Are you insured?

Especially if you own a home-based business, make sure that you have enough insurance coverage for any losses that might occur, whether they be theft, natural disaster, or other disposal of assets.

Check with your insurance company and find out what is automatically covered by your homeowner's insurance and add any riders that are necessary to keep your business covered as well.

If you have customers or clients who visit your home regularly to do business, make sure your insurance provider offers adequate personal injury coverage as well.

   
How much insurance do I need?

Preventing Burglary

While nothing is foolproof, there are many ways you can decrease the possibility of theft in your business:
*Locks-have locks on all doors, and use them!
*Key Control-give out as few keys as possible. Also, have a log of who has which keys and know when they are authorized to use them. Electronic keys can help you know who opens which locks and when.
*Lighting-adequate lighting can also help prevent burglary. Timing devices that turn lights on and off may be helpful during extended absences.
*Alarms-another deterrant to burglary is an alarm system. Many are monitored off-site 24 hours a day and will immediately notify the Police or Fire Department.

   
How much insurance do I need?

Types of Losses

There are many different ways to "lose" part or all of you business, such as:
*Theft
*Embezzlement
*Natural Disaster
You should meet regularly with your insurance agent and auditor to be sure you're adequately covered.

   
How can I prevent business losses?

Criminal Checking

Criminal Records Checking- In order to protect your business from liability you may need to do a criminal background check on employees who will
*be bonded because of access to money or valuables
*carry a weapon
*drive a company vehicle
*have access to drugs or explosives
*have access to master keys
*have a great deal of contact with the public, patients, or children
*be filling a position that requires a criminal record check under state law

   
How much insurance do I need?

Write it down

Always keep a listing of all office/business equipment that you use for your business. In case of a natural disaster or theft, you will have handy records that your insurance company can use to process your claim.

Helpful tips of recording equipment:
*take pictures
*write down serial numbers
*keep receipts and documentation
*note physical location of equipment

   
How can I prevent business losses?

Preventing Embezzlement

Even if you have an internal auditing system that makes embezzlement difficult, the danger of collusion still exists. Consequently, some companies protect themselves from employee dishonesty by bonding their employees.

   
How can I prevent business losses?

Preventing Embezzlement

There are four basic things that you can do in implementing an internal system of controls:
Screen applicants before they are hired.
Periodically examine canceled checks to see if there is anything unusual.
Take precautions in preparing payroll: have more than one person prepare it, have several different people prepare it, or oversee it yourself.
Have two people sign off on checks, preferably in front of each other.

   
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Guru Spotlight
Tammi Reynolds