Learn 7 Steps to Avoid Business Fraud

All businesses should take the time to mitigate any risks of fraud. Smaller and mid-sized operations are vulnerable to business fraud, and the after effects can be devastating for everyone involved.

Business fraud usually falls into three different categories: theft, financial statement fraud, and asset misuse. The vast majority of business fraud schemes are related to outright theft, such as stealing cash or claiming fraudulent expenses, and asset misuse, like granting kickbacks.

Business fraud can be tough to tackle, especially for smaller businesses who might be tight-knit and incorporate many family members. Considering your employees as friends or family can make it hard to confront cases of business fraud and theft. Plus, smaller businesses usually have less financial oversight, less knowledge on fraud schemes, and remain vulnerable to even small instances of fraud (since they can completely derail operations).

If you are looking to avoid business fraud, keep these seven steps in mind as you operate your enterprise.

Separate Accounting: Smaller businesses usually have one person who works on everything pertaining to finance. This system makes it easy for people to skim the company and misdirect money to other places. All businesses should have at least two people working on the finance side, or develop a relationship with an accounting firm on the outside.

Learn About Employees: Most business fraud is carried out by an employee on the inside. Take the time to really understand an employee’s background and knowledge before hire. Background checks should be a necessity, along with occasional time off, since this could expose a scheme in place.

Run A Tight Ship: All businesses need to be very careful about who has financial knowledge. This means restricting access to account information, building a verification system for reimbursements, and carrying out audits on accounting books.

Watch Your Bank Accounts: Online banking makes it easy to check out accounts and statements at any time. Be sure to compare the online data with your paper copies to make sure everything is on the same page. Watch out for checks that are not in order and strange payment recipients, who could be the benefactors of a scam.

Properly Train Employees: One of the best ways to avoid business fraud is to train workers on how to spot it. Encourage them to report strange behavior through an anonymous system and craft a business code of ethics to keep everyone accountable.

Click here to learn why you have a lawyer review your contracts!

Protect All Credit Card Numbers: Credit card fraud is becoming a popular way for people to steal money from businesses. A good way to ward this off is to separate all business and personal accounts. This keeps funds safe on both sides if the other accounts are breached by credit card fraud. All businesses should be very careful about who they give out credit card numbers too and use online payment services to mitigate any risks.

Audit Regularly: Businesses should subject themselves to regular audits on all financial activity to stay accountable. Non-scheduled audits, especially if they are from an outside source, can help detect fraud that might have gone unnoticed otherwise. Many companies are experienced at carrying out audits for businesses of all sizes and will give valuable advice about warding off business fraud in the future.

Keep the above seven steps in mind to fight against business fraud. It can strike a business of any size, but good due diligence will keep your operations safe and protected.

Do you have a question about business fraud? Click here to contact Von Esch Law today!

Courtesy of Cuselleration

Here Are 2019 Changes to Alimony Laws in California

Alimony law is often very confusing and comes with a lot of moving parts. There are a few changes in California alimony law that have come into effect for 2019 and should be taken note of.

One of the biggest 2019 changes has to with spousal support. Previously, spousal support was tax deductible for the spouse that way paying and was taxable income for the spouse that was receiving it. Now, alimony will no longer be tax deductible, and the recipient spouse will not have to pay any taxes on it.

This big change to alimony law came due to the passage of the Tax Cuts and Jobs Act, which scrapped a 75-year old spousal support payment tax stipulation. The new law came into effect on January 1st . Divorce agreements signed on or before December 31st, 2018, will not be affected by the new rules.

The change of the law relating to taxation and alimony means divorce negotiations will most likely become trickier, especially if the spouses were wealthy, since these types of people often benefited the most from the tax deductions pertaining to alimony.

Some think it will lead to smaller spousal support payments because the tax advantages with a larger sum are now lost. The alimony tax deduction before the new Tax Cuts and Jobs Act change was a strong bargaining tool in divorce proceedings, but many see this advantage as a relic of the past due to the new stipulations.

If you signed an agreement of separation or divorce before the end of 2018, and the support order is modified after the start of 2019, the pre-2019 tax rules still remain in effect. The only exception to this rule would be if there is a specific clause in the agreement that says otherwise. You will want to have a lawyer review the separation or divorce agreement if you are not sure which tax law you will be subject to.

Click here to learn new the pet custody laws!

All payments must qualify as spousal support or alimony in order to be tax deductible under the pre-2019 legal standards. Payments that qualify as spousal support only are eligible if the spouses do not file a joint tax return, if the payment is made under a legal divorce agreement, and if the actual funds are in the form of cash, a check, or a money order.

Additionally, spousal support must not be treated as child support and is not able to be part of the settlement of any property.

Some have questioned if they are able to pay more in child support to offset any of the changes under the new alimony law. Child support is never deductible and it is not counted as taxable income by the person who is receiving it.

Divorce proceedings are a tricky affair that can often take a lot of time and energy to move through. A good lawyer will not rush the process but will make sure that everything is taken care of and both sides are satisfied with the arrangement. However, the changes to alimony law can be very confusing and can change a lot of the divorce aspects depending on your situation.

As a result, be sure to speak with an experienced and professional divorce and alimony attorney as soon as possible so you can get up to speed with the new changes, especially if your divorce agreement is dated on or after January 1st, 2019.

Do you have a question about alimony laws in California? Click here to contact Von Esch Law today!

Courtesy of Cuselleration