Tag Archives: systems

If Lost… Then What?

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At the end of May, I was on my way to an event, when a flash of pink on the sidewalk caught my attention. I stopped and realized that I was looking at a small square of leather. I bent down, picked it up and turned it over in my hands. It was a wallet with a MetroCard, some credit and debit cards and a driver’s license in it. I pulled out the license, looked it over, and walked over to the restaurant that was a few feet away from where I had just found the wallet. I must have made a few people nervous, staring at them and then down at the license, to see if anyone there resembled the photo. No luck. I then pulled out my phone and tried a few quick searches, online, to see if I could figure out how to contact this woman. Her name was more common than I imagined; several options came up and none appeared to be her. Yes, her license had an address on it but, the license had been issued several years earlier and people in New York City can move around quite a bit, in search of amenities such as a view, an elevator or affordable rent. As I was running late, I decided to go to my event and put my search off until later. On my way, I spotted a parked police car. I got excited, thinking that I may be able to hand over the wallet, but the excitement faded when I got close to the car and found that there was no one sitting in it.

When I got home and had more time to do so, I hunted down the woman whose wallet I had found and delivered it to her. Even if she had cancelled her cards, I am sure she was happy to get her stuff back – who knows maybe her MetroCard still had 29 days of use left on it. That experience reminded me of a time, years ago, when someone stole my handbag at the airport. I was livid that someone had invaded my space and even stood yelling, in the terminal, for the thief to just take my cash and give me back my stuff. Suffice to say, that did not happen. I did, fortunately, have a kind gentleman give me money to get the train back home. However, a few weeks later, my phone rang and it was the airport, calling to tell me that my bag had been found. They had been able to contact me because I happened to have a dry-cleaning slip in my wallet, and my phone number was on it. I was lucky that I had that slip in my bag but these two events really got me thinking about recovery plans, not just in business, in other aspects of our lives.

With a wallet, for instance, you can keep a business card in the wallet, or put a small card in your wallet with an email address and/or phone number so that, should you be unlucky enough to lose the wallet and a kind stranger picks it up, they can contact you and figure out how to get it back to you. It is an easy thing to do and could be hugely useful. It doesn’t even have to be your usual email address, if you have fears about your inbox being inundated by unwanted email, you can create an email address that you keep for moments such as this.

We never think that we will either lose our stuff or have it stolen from us but it can happen to any of us. It can be personal or it can be a business loss, such as a system crash, or theft and, in all cases, having a recovery plan will go a long way to make recovery less stressful and less expensive. If, at this very moment, you lost everything on your computer, what would you do? Does the thought give you heart palpitations because you would lose very important data, with no way of getting it back? Would you have to shell out a lot of money and spend valuable time working to try to recover everything? Would you wonder whether or not your business could survive such a loss? If this thought is a scary one to you, you should be thinking about sitting down with trusted professionals, to create and put a comprehensive protection and recovery plan in place. You should review various scenarios, even if you think it wouldn’t happen to you. Things to consider when doing this:

  • Are you backing up your data on a regular basis? Automating this process is a great way to make sure that it happens – you don’t want it to all depend on your remembering to do it.
  • Where are you keeping your backups? Do you keep a backup offsite and unconnected to your current system? You don’t want your backup corrupted, should your system go down.
  • Are you checking the integrity of your backups? It isn’t helpful to think you have been creating backups and find out, when you need the backup, that the process was not occurring.
  • Now that you have backups, do you have a recovery plan? Do you know what you are going to do should things go awry? Does your staff know? Do you have the plan in writing and in a space where it can be easily accessed? Have you trained your staff in this recovery process?

There are people who are well-trained in helping you create a backup and recovery plan and that can start with your CPA. You want someone who has experience and knowledge regarding best practices that are practical, useful and effective.

We are humans who work with technology that we have built and we must, therefore acknowledge that we are not infallible and we must therefore create, review and update our contingency plans. And that plan can never just be relying on the kindness of strangers.

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I Trust You, But…

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Last Saturday, my husband showed off some of his work in an open studios event at Industry City. He did the lion’s share of the work but, on Friday evening, he asked me to come over and help him a little. He assigned me the job of placing 5×7 prints of some of his work in 5×7 frames. It sounds straightforward enough and I am sure that my husband trusts me and has great confidence in my abilities. Nevertheless, after I had framed a few photos, he came over and checked my work. It turned out that some of the photos were not quite centered in their frames. He handed them to me, offered me some tips on how best to center photos in frames, and asked me to redo them.

This reminded me of when I was a kid and my parents would check my homework. I know that they felt that I could do it. I know this because they would say things like, “You can do better than this; try again.”Most of the time the issue was that my handwriting was barely legible on a good day. Knowing that my work would be reviewed, on days when I was tempted to rush through my homework, maybe because I wanted to play or watch TV, I willed myself to slow down and get it done correctly the first time around. I did not want to get into trouble and I definitely did not want to have to do my homework over again.

Recently, I have been reading stories about people in charge of a business’s finances perpetuating fraud. These people carried on their shenanigans and were not caught until the businesses they were employees of were practically going under. You know why? Because no one ever checked their work. Ever. In the cases that I read, the business owners were all charmed by the charismatic and capable people that they hired to manage their finance departments. The business owners gave these managers unfettered access to the companies’ bank and credit accounts and, boy, did those managers take full advantage of this access. They opened new credit accounts, they maxed out existing accounts and they went shopping! These business owners only found out what was going on when purchases they were trying to make were declined because their accounts were wiped out. In every case, the owners had left the finances up to the managers that they had hired so that they could focus on operations. They seemed to forget that an essential part of a business is the money needed to run it. They did not keep tabs on where the money went after it came in.

Because none of us is infallible and because too many among us are not always honest, it is vital that work is checked by someone else. Depending on the size and complexity of an entity, there are various ways in which to incorporate checks into a system to prevent and detect error and fraud.

  • There must always be a review of another party’s work. In a very small business, this may mean that the business owner is periodically reviewing bank and credit card statements. It may mean that the business owner will check incoming mail on a random basis, to make sure that unauthorized statements have not been opened in the name of the business. In larger businesses, there should be processes where the work done by one employee is reviewed by another employee for error and misstatement.
  • Someone other than the person booking cash entries in the ledger should perform reconciliations of the bank and credit accounts. Reviews and reconciliations of payable and receivable accounts should also be performed.
  • Make sure that staff take vacations and that, while they are on vacation, someone else does their work. In this way if anything is amiss, a new pair of eyes may catch mistakes or other missteps that are being made. In addition to this, having someone else do the work also means that one person does not have exclusive knowledge of a process in a business. In this way, no employee is indispensable. Also, when more people understand a process, and employee is less likely to try hide fraud in the process.
  • If possible, move work around among employees, again, so that more people in a department have a greater understanding of what is going on. The saying is familiarity breeds contempt; it can also breed careless errors. People operating in autopilot can become too comfortable with the work that they are doing and make careless mistakes because they are not paying close enough attention to the work.

Check, check and check again. If people know that there are effective checks in a system, they are likely to be discouraged from trying to steal from an entity. If people know that their work will be checked, they are more likely to pay attention to details so that they don’t have to do the work over again. Even when I was frustrated because the photographs seemed to shift all by themselves when I tried to secure them in the frames, I growled, I complained, and I started over and over again until I got it right. You know why? Well, because I like to do a job well AND I didn’t want my husband handing the work back to me and calling me out on getting it wrong.

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