Category: small business financing

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Payment Card Roll Call: “Not Present” fraud likely to increase as EMV takes hold

Payment Card Roll Call: “Not Present” fraud likely to increase as EMV takes hold

rollingballNo retailer wants to become the next Target (pun intended).  Payment card fraud costs businesses and consumers billions of dollars every year.  What’s even more frightening, many of the breaches in the news are the result of innocent participants inadvertently granting access to the bad guys.  The Target breach in 2013 exposed the data of 110 million payment cards.  Hackers got into the network using perfectly good credentials of the HVAC company.  Sometimes password security just isn’t enough, which might bring in to question the security of all those SaaS subscriptions and online shopping sites folks use these days.

EMV chip technology, the standard around the world which has just recently become a standard in the United States, has done a lot to stem the tide of credit card fraud in other countries.  As it was implemented in various countries, guess where it pushed the fraudsters?  Where the anti-fraud technology wasn’t, of course! The United States was among the laggards in requiring EMV chip technology for payment cards, opening the door for bad guys and turning the US into a veritable haven for credit card fraud, “accounting for nearly 50% of global fraud losses, according to the Nilson Report[1]”.

EMV chip (or chip and pin) technology will go a long way to prevent credit card fraud for businesses accepting payment cards… in-person and counterfeit card fraud, anyway. Online retail, on the other hand, not so much.  A chip on the card doesn’t really help when the transaction is completed with the card not present (CNP).  Some industry analysts suggest that CNP fraud losses will exceed $6 billion within the next few years, making e-commerce and online payment security a high stakes game for even the smallest of retailers.  As it gets more difficult to hack the payment system when the card is presented, bad guys will fall back in even greater numbers to the card-not-present model to find their victims.

Online retailers and service providers must take additional steps to secure their systems and protect customers and business partners, and face the challenge with the understanding that effort must be ongoing as new threats emerge. Tokenization is a prime method of layering the system with security, making the merchant system somewhat less of a worthy target by not storing the card data in the system.  Even if the system becomes compromised, the bad guys wouldn’t find customer payment card information.  There are numerous other steps a business can take to secure the CNP sales, including applying behavioral analytics which might identify rogue activities, or using 3D Secure to authenticate a cardholder’s identity at the time of purchase.   The point is that CNP fraud is likely to spike as EMV technology takes a firm hold in the US.

Card fraud is already escalating rapidly for ecommerce retailers and other card not present channels – it didn’t take EMV to start on that roll but it will surely give it a push.  Paperless payment systems, SaaS subscription services and online application service usage are increasing dramatically and there’s no chip to get in the way of these transactions.  Sellers of any and every service utilizing online payments need to now pay particular attention to system and information security.  The risk has always been there, and EMV chips and other shifts in pay card technology simply give it a push.

jmbunnyfeetMake Sense?

J

 

[1] Chipping away at Credit Card Fraud with EMV; Information Week Tech Digest powered by Dark Reading, Nov 2015; NilsonReport http://www.nilsonreport.com/publication_newsletter_archive_issue.php?issue=1071

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Analysis, forecasts and modeling: What’s the point?

Analysis, forecasts and modeling: What’s the point?

financeIn today’s business world, risk, uncertainty and volatility are just par for the course – everyday realities of simply being in business.  Nothing is certain, they say, except death and taxes.  Yet there is a fine art to driving profitable growth in a business, and adapting to existing and emerging risk takes a great deal of experience, information and agility.  While planning and process development may occur at many levels within the organization, it is the FP&A (financial planning and analysis) capability which helps top performing businesses be top performers.

Financial planning and analysis are activities central to enterprise performance management (EPM) and must necessarily extend beyond finance.  Integrating various functional domains in the business (financial, operational and strategic), FP&A should bring data together from the various facets of the business and use the information to help structure and guide the organization toward meeting short-term and long-term goals.  Among the most critical of the duties of FP&A is calculating the financial impact, the monetary effects, of potential business decisions.  Everything in business means money, so there is always an impact to a decision.  With the right information supporting the decision, it is far more likely to have a positive impact and a level of sustainability.

While many CFOs may recognize the importance of performance measurement, planning and forecasting, a great many also believe the process isn’t very effective. The cause is frequently the divide between the various domains in the business and the information systems supporting them.  Operational data are distilled into summary financial information and fed to finance systems, losing much of the underlying intelligence that might be gained from analysis of the details.  Strategic development and planning may overlook certain volatile elements in the market, or may base successful outcomes on an expectation that conditions within the business will not change.  Finding ways to integrate the data from the respective domains into a comprehensive model is essential to developing a better and more robust forecasting and scenario-playing capability.  With the right information, analytics may be applied to all facets of management decision-making, anticipating and shaping business outcomes far more effectively than could be done without the insight.

Small business owners may believe that things like “predictive modeling” and “enterprise performance management” aren’t things they need to worry about, but the small business could use this information just as beneficially as a larger enterprise – perhaps even more as the insight could be the key to small business survival and growth.

Using analytics, the owner is able to adjust and re-align strategy in real-time to keep on the right path and goals clearly in sight.  Analytics can also help a business better understand what really drives revenue, working capital and profits.  Analytics can even help managers align compensation and strategy with business objectives, preventing compensation issues from outpacing business benefit.

There is a cost to growing a business, and some strategies might be more sustainable than others.  Time will tell, but it is great if the business owner has some business intelligence that might indicate what’s going to happen before it actually does.

Make Sense?

J

 

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Formula for Success: The Cloud and a Pair of Bunny Slippers

Formula for Success: The Cloud and a Pair of Bunny Slippers

drawn-bunny-slippersInformation technology and the “cloud” is amazing.  With the right IT resources and connectivity, individuals and small businesses are able to compete at global levels with much larger organizations, and are proving that placing focus and attention on the right aspects of the business helps the business perform better. The right IT approach is to use technology to make the business smarter so more gets done in less time and with fewer resources – this is wearing the bunny slippers.  The goal is leveraging systems, software and connectivity to be more efficient and effective, creating the time to stop and think for a while, innovate, or simply relax.

Too often the business owners or managers are tending to computers and systems which simply support status quo and aren’t spending their quality time growing and managing the business – getting more clients, creating new products, rising above the competition. Cloud computing models play a big part in changing that standard, supporting new levels of business sustainability and supporting process improvements never before imagined.

Cloud computing is now integral to many business technology models because the potential benefits are great.  Cloud computing solutions and outsourced information technology management allow businesses to focus on what they do best, and  not on the IT supporting it. These solutions and services are in high demand because they allow businesses to scale easily and affordably, paying only for what is needed at the time.  Improved collaboration and centralized access to applications and data make cloud computing models an important consideration for every business.

I’m not the only one who recognizes how beneficial the right IT approach and anytime/anywhere access can be. Others have recognized the freedom and flexibility these new technology models have enabled… and know the value of a pair of bunny slippers.

Joanie Mann Bunny FeetMake Sense?

J

Doing Business In Bunny Slippers Around The Globe.

Susan Solovic

When I first started my business, like many start-up operations, I decided to work from home.

I equipped an empty bedroom with a card table for a desk, cardboard boxes for filing cabinets and my dogs served as my office assistants. Voila! I was ready to roll, and it was great.

I could go to work in my fuzzy pink robe and bunny slippers. After all, no one other than the dogs would know.

Start-up business operations are always strapped for cash. It’s much less expensive to conduct business from your home than to rent commercial office space. And thanks to the Internet and technology home-based businesses can easily become international enterprises.

Read more at http://www.business2community.com/startups/doing-business-in-bunny-slippers-around-the-globe-01252506

 

 

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Two Ways to Get QuickBooks in the Cloud

Get QuickBooks in the Cloud: Hosted QuickBooks Desktop or QuickBooks Online

cloud-computingRunning applications online, or “in the cloud” using today’s parlance, is top priority for a lot of businesses.  It’s not that these organizations have a burning desire to post their financials to the web, which is what a lot of folks thought was going to happen when we first suggested they use their financial applications online.  Rather, business owners and managers have begun to recognize and experience the benefits of connecting their various locations, remote and mobile workers with real time access to business applications and data.  Further, centralization of IT coupled with outsourced IT management and subscription service pricing has introduced financial and operational benefits which make businesses more cost-efficient as well as more agile.  From being the basis for foundational process and workflow improvements to allowing the repositioning of IT costs from capex to opex, online application services are proving their value in various ways every day.

The evident popularity of cloud solutions is clearly visible in one small corner of the global software marketplace: the small business accounting solution market. Intuit’s QuickBooks product, almost a default go-to with entrepreneurs and small business owners, is still the most prevalent accounting solution in use by US small businesses.  While there may be growing usage of other applications on the web, such as Xero or FreshBooks (both are awesome SaaS apps that do what they do quite well), there is equally strong growth in Intuit’s own SaaS version of QuickBooks.  The SaaS applications are easier to localize for different places in the world – different languages and currencies – so international use of these products is likely to continue to grow.  Even more to the point, these solutions address functionality and pricing levels which are acceptable to entirely different classes of users that previously wouldn’t even consider buying accounting software to do the books (like freelancers and solo/soho operators), so the overall size of the market of “businesses who use accounting or bookkeeping software” is actually growing.

Intuit’s QuickBooks Online edition is a true SaaS solution that is quite different from the desktop-based QuickBooks.  While QBO has gained tremendous popularity, it has yet to reach the user numbers the desktop products have.  The desktop solutions boast not just a particular range of functionality, but integrated applications and add-ons, and – perhaps most importantly – being a foundation for a wide variety of financial and business record keeping, bookkeeping, accounting, operationally oriented and reporting processes.  To sum it up: it’s embedded.  People know the software, the data is in a known format, and the product is simply part of how the business operates.

Once a solution is as entrenched as QuickBooks is – kind of like the entrenchment Microsoft Word and Excel have in the productivity area – it doesn’t go away very quickly and only when the value proposition is much greater… and maybe not even then.  Rather, folks find ways to make the solution they want work for them.  This is where hosting comes in and meets with the market’s demand for running applications (yes! even desktop applications!) online, as managed subscription service.

Running your QuickBooks desktop online via a hosting provider is how businesses take advantage of the best benefits of SaaS without actually converting to a SaaS application. They retain investments in training, process and integration yet introduce mobility, remote access and office connectivity, centralized information and predictable costs. QuickBooks-using businesses need to know about hosting their QuickBooks and the providers who can offer anything from standardized to extremely customized service.

As technology continues to evolve at ever-increasing rates, businesses will continue to be faced with new paradigms for doing business.  Some will adopt early and some will adopt later, and some simply won’t adopt.  Certainly the market as a whole doesn’t adopt as quickly as software companies would like, but then that’s always the way it is.  Customers will do what works for customers, and right now hosting is working for QuickBooks customers.

Joanie Mann Bunny FeetMake Sense

J

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EMV and Retail – Your Trusted Advisor Should Be Advising You about This

EMV and Retail – Your Trusted Advisor Should Be Advising You about This

EMVChipCardThere is ‘big change a comin’ for retailers, merchants and any business that accepts credit cards for payments, and there are a great many businesses that are completely unprepared for it.  The change, what is being referred to as the “Payment Networks’ Liability Shift”, goes in to effect in October 2015 and places the burden of liability for fraud squarely on the shoulders of the merchants and card issuers who are not compliant with certain payment system security standards.  Accounting professionals and Trusted Advisors – here’s one of those things you should be helping your clients with.  Help them get informed, trained, and prepared.  Help them to understand the risk and decide on a course of action.  This is part of what makes a trusted advisor: they got your back.

The way things generally work in the US today, a fraudulent charge on a credit card is likely to end up being covered by the credit card company (the issuer). Starting in October, retailers are supposed to be able to accept payment cards with EMV chips (named for the founders of the standard: Europay, MasterCard and Visa), and must process those cards using the compliant technology that takes advantage of what the chip processing and security offers.  If these conditions aren’t met – like having a POS or payment terminal not capable of reading the EMV chip – the merchant is on the hook for the fraudulent transaction.  Given the volume of credit card and payments fraud in the country you’d think that most merchants would already be ready for this, but replacing all the POS and terminal equipment could be pretty costly.  It may take a bit of analysis to understand the real risk and compare that to the cost of compliance.  Certainly it makes sense to always be in compliance, but there are always factors which influence how quickly (or how completely) compliance may be met.

The liability shift is part of the influence being leveraged to get businesses to adopt newer and more secure models of electronic payment acceptance and processing.  It is simply the case that the magnetic strip on a credit card isn’t good enough any longer.  The new EMV Chip reading payment terminals require that the card be inserted and processed by the terminal rather than simply swiping the magstrip across a reader.  Over 40 years of using the magstrip approach has helped to earn the United States a top spot on the leaderboard for credit card and financial fraud, and we seem to be lagging behind in adoption and implementation of the EMV technology even though it has been shown to seriously curtail fraud even as payment card usage increases.  The EMV chip process, which encrypts information about the card so that even the local POS system doesn’t get access to it, is far more secure and is being widely adopted and used in Europe, Canada, Latin America and the Asia/Pacific regions.  Now the clock is ticking for US businesses to get ready to either update their systems or accept the liability for not doing so.

The shift in how payment cards are made and processed is simply one of many changes which will continue to occur as technology and human ingenuity continue to be applied in both good and not-so-good ways.  Recognizing that the pace of change is increasing, businesses must find ways to remain informed and prepare for those changes which will impact the business operation and sustainability.  This is among the essential roles the trusted advisor plays, and the current imperative simply underscores the growing need for such advisors by business large and small.

jmbunnyfeetMake Sense?

J

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Trusted Advisor is About the Work, Not the Title

Trusted Advisor is About the Work, Not the Title

Many accounting professionals believe they are THE trusted advisor the client comes to for advice and guidance on business financial matters.  Having fully bought into the messaging about the value of the accounting and tax work, these professionals are feeling pretty relaxed about their client engagements.  They believe the client will come to them with questions and provide the opportunity to deliver advice or work.  And each year  many clients return to get their taxes prepared or financial statements produced, and even new clients may appear.  But the work remains largely the same – financial statements and tax returns, and addressing additional needs only when the client brings it up, which isn’t all that frequently.

happy_clientOn the other hand, there are professionals who recognize that a proactive approach to helping clients results in better and richer client engagements and better-performing client businesses.  These professionals are truly the business advisors to the client – the trusted partners who understand the variety of conditions which impact business performance and care to make sure they are properly addressed.  This advisor not only reports but makes recommendations and provides guidance on certain situations or processes which are essential in the business model.  These professionals recognize that the bookkeeping and operational information collection is not simply a means to an end; these professionals understand that these foundational processes and the information they encompass are the important details which reflect the true performance of the business… details which no summary report can fully describe.

Having more direct participation in clients’ financial systems is a highly successful component of practice building, helping the firm to mine opportunities that may be hidden in current or new client engagements.  This does not mean that the accounting professional becomes part of client operations or workflows.  Rather, it suggests that the accounting professional understand these aspects of client operations and assist in the development of necessary controls and processes involving data collection or validation.  It may include the implementation of KPI and benchmarking solutions to help identify problems and map improvements, or it may involve the installation of a solution to improve the importing of orders and other transactions into the system, improving the efficiency in processing the information while at the same time reducing the potential for manual data input errors.

Regardless of the depth of direct involvement in client systems, professionals can more fully benefit from every client engagement by providing some level of training, consulting or supporting service in addition to compliance and reporting work.  Services may be aligned toward helping clients set up or support their own in-house bookkeeping and controllership responsibilities, or they may be more suited to providing real-time guidance and review of client business performance data. Either way, the quality of the financial information derived is generally far better and requires less work to adjust and report on.

The key is recognizing that the work involved – whether it is through training, regular process and data reviews, or more direct participation – is not intended to simply streamline reporting on outcomes.  The work the trusted advisor performs is intended to help the client save money and improve business and financial performance, and the practice is rewarded with higher value billable services and a much increased opportunity to engage the clientele in other efforts.

jmbunnyfeetMake Sense?

J