IntraScope Accounting Solutions, LLC

 

 

January 2003 Edition

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MANAGEMENT

 

In recent years, there has been discussion around CRM or customer relationship management.  What exactly is CRM?  It is about treating customers differently so that a company can maximize the value of each customer to the company.  A simple version of CRM is used by Amazon.com every time they send you an e-mail that says: based upon your prior purchases, we have a new book you may be interested in.  One of the outcomes is an increase in revenues by customers who find us to be more valuable, who stay more loyal and who do more business with us.  The cost of serving a loyal customer is lower, thereby increasing the bottom line.  Whose job is it to manage customer relationships in your company – most likely your most valuable asset?

 

TAX TIP

 

Finally, self-employed individuals, S-corporation shareholders and partners can now deduct 100% of medical insurance premiums starting in 2003.

 

Social Security wage base for 2003 is $87,000.

 

Maximum contribution to 401(k) plans is $12,000 unless you were born prior to 1954 in which case you can make an additional $2000 contribution.

 

Maximum IRA contribution is currently $3000 but it may be increased later this year.

 

FINANCIAL

 

According to a study by the Association of Certified Fraud Examiners, internal fraud may cost as much as $600 billion a year – about $4,500 for every worker.  Research indicates that for an employee to commit fraud, three things must be present:  financial pressure, rationalization and access to funds.  Financial pressure to an employee is an immediate, unsharable financial need – it cannot be solved through traditional means such as loans, etc.  Rationalization occurs when an employee says “I am only borrowing the money”, “everybody does it” or “the company really owes me this”.  Access to funds is the one point a company can control.  By implementing adequate internal controls you can reduce the risk of fraud in your company.  Many business executives don’t know that most internal controls are easy to implement, even with a small staff.  Finally, creating a culture of honesty will go a long way toward prevention of fraud.

 

 

DID YOU KNOW…..

 

Most people who commit fraud consider themselves basically honest people that just made a bad decision?