April 10, 2025 • 35 mins
Fraud Alert! How to Shield Your Small Biz from the Sneaky Stuff
In this episode of Peace Luv Biz, Steve and Mary tackle one of the most under-the-radar threats to small businesses...fraud. From sneaky employee schemes to cyber scams that target your books, they dive deep into what fraud actually looks like, how it creeps into your business, and how to build a fortress of prevention around your hard-earned success.
This isn't just about scare tactics, it's about real-world tips, tools, and mindset shifts that help you stay two steps ahead. With their signature mix of savvy advice and soulful business wisdom, Steve and Mary lay out how to spot red flags before they turn into financial disasters and the small steps that lead to big protection.
Key takeaways:
✅ The most common fraud traps small businesses fall into (and how to avoid them).
✅ Why trust is not a fraud strategy, and what internal controls you actually need.
✅ How to create a fraud-resistant culture in your biz.
✅ The checklist every business owner should run through monthly.
Subscribe and swing by www.peaceluvbiz.com for practical resources, biz-saving checklists, and free downloads that make protecting your company a breeze. Until next time, keep your books balanced and your vibes high! 💜📊🔥
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
Hey guys, welcome to another episode of Peace Love Biz.
I'm your host Steve Higgins and we're joined by Mary Roach, the chief headbanger Miss HelpMe Help You.
Deep in the heart of tax season, running into a lot of...
I don't know if you want to call them problem clients, but people that don't understandtime of year and things that are going on.
(00:30):
But yeah, how are you doing?
at Christmas that the 25th is two days away.
They're aware.
They know.
I started laughing.
I apologize.
I started laughing because you said deep in the heart and then you said taxes and in myhead I was like, why are we in Texas?
Deep in the heart of...
(00:51):
Yeah, just rearrange the letters and you're right there, aren't you?
I'm like, where does he come with this?
Yeah, so I have a question this week.
How are you doing?
I, I feel disheveled, I feel stressed, but I actually feel really good today.
(01:14):
it's, I kind of reset a little bit and regrouped and I think that we're doing good thing.
Well, I know that we're doing good things, but we are definitely in productive mode.
I've done some really good meetings with people that have really
realigned and refocused my target and what I'm trying to do.
(01:38):
So I think we're in a good place.
So what about you?
I'm surviving.
for everybody out there listening, this is Stephen's first real tax year, tax season withme.
And I asked him because I typically do have a total slip and meltdown at some point and Ihad it and it was bad.
(02:02):
And Stephen was like, my God, this is actually real.
Yeah, and I was trying to be as supp-
it with me.
I was trying to be as supportive as I could be without showing my fear, own insecuritieswith the whole thing and I'm like, we could do this, we could do this.
(02:26):
I was essentially had a, I don't know what you call it, a paper bag in my own head, likein and out, in and out.
But yeah.
I think we got through the other end, we're just taking it one thing at a time, one returnat a time, one, one thing at a time.
(02:49):
Um, yeah.
you know, all you can do is just one thing at a time.
No more than that.
We're only human.
I mean, we're amazing, but we're only human.
commitment to ensuring that it is not a tax year and it is just the tax season is real forus so we're doing everything we can for that but today's topic
(03:14):
April 30th is going to be my deadline, but still better than an entire year.
Yeah, exactly.
you know, we'll still have those people that have come that come to us in July saying,hey, you need to file taxes.
And we'll be happy to help because if anybody does need any help with tax filing, thenyou're welcome to reach out.
(03:37):
We'll file extensions and stuff.
So go to peace of biz dot com and put a contact form in.
We'll get back to you pretty quickly.
But yeah, it's never too late to ask for help.
So definitely take advantage of that.
Today's topic though is going to be a fun one.
Because there's a few things to touch on around fraud and fraud as you guys say inAmerica.
(04:04):
Fraud.
Kind of like frog with a D is how I have to think about it when I say it.
And then that just makes me think of ribbits and stuff.
Never mind.
Anyway, yeah, so how to protect small businesses from fraud.
(04:25):
And now I can't stop thinking about how I say that.
So there's a few things we're to touch on.
Definitely from more of an educational standpoint, how to protect yourselves, how to makesure you don't get caught in traps and things like that.
Obviously getting a professional to take care of
(04:47):
your books, take care of your accounting side is always going to help protect you.
But Mary is a master of forensic auditing and forensic accounting.
Some of the stuff she picks up on is insane.
This week in particular, do we want to just dive in and just talk a little bit about thisone?
(05:14):
So one of the
One of the common types of fraud that people experience is invoice fraud.
you know, there's vendors that are gonna pay people and sometimes the numbers won't matchup.
And that's what's happened this week with one of our clients.
(05:35):
And thankfully Mary's the one that's gone through and has been like, I can't make sense ofthis.
Why is this not adding up?
and Mary's obviously done what she does and figures out what's going on so do you want todive in a little bit on that?
Yeah, so, you know, first thing is, you know, just don't take someone's word for it.
(05:58):
If they say the total thing that they're sending is $12,000 and they say these are all theinvoices, you know, make sure they add up.
Don't just assume it.
Like go through, make sure that the invoice that they're paying, if they're payingmultiple invoices, five, six invoices, and they're listing them, make sure that their
(06:18):
number on their invoice
that they're sending over for ribbittons matches the one that you originally sent them.
That's number one.
that's for starters.
Number two.
you know, if, if it is, you gotta look at that stuff.
Cause it's really easy to just click and go, okay.
(06:40):
It's fine.
And then at the end, doesn't add up.
So they may have all the numbers there, but the total is really 15,000, not 12,000.
There there's another, there's another thing.
There's another error.
There's a, another red flag.
The problem becomes is in this case.
There were, God, I'm trying to think.
(07:03):
There was a difference of like close to two grand.
And then I went into the next thing from the next client or from the same client, theirnext payment.
And none of the invoice numbers, first of all, there wasn't the correct invoice numbers ormissing numbers from the invoice.
And then the amounts were off.
(07:27):
Then I go to the next one and just kept repeating.
So now I've got to go through these, the deposits I have for this year, double checkeverything, redo it.
And then I've got to do a whole audit on them for the last two years because in thissituation we've already had embezzlement and payroll fraud from hired help.
(07:52):
So now we're going down a rabbit hole of a second time of fraud.
and it just, I mean, I love what I do.
just, that one client, he has a heart of gold and now I'm like, damn, again?
Like, you know, there's just pay attention, like just the smallest things you may thinkit's nothing.
(08:15):
It's everything.
It's everything.
it is and it snowballs.
Like, like you said, it was just the same, the instance on one invoice and then the nextone.
And then it, it builds that case and the pattern for that vendor.
It's like, okay, how long has he worked with that vendor?
How long has that person then been essentially screwed out of X amount of money?
(08:44):
And what is the result of that?
It could.
I have to go bigger because we've already had an existing case where the the person thatwas getting this was supposed before I came along, they were doing this.
They were recording the payments and then I just match up on the banking side of it.
And now I'm like, you know, I hate thinking it.
(09:05):
I hate thinking the worst because when I do, I'm normally right.
That's the problem.
Like I.
Usually right and everything that I say I know because I don't go outside my lane.
I don't jump into things.
I'm not good at so I look at it and go I really think this has been going on a while andshe could have been doing it because even that I'm going through payments and I'm like,
(09:34):
how were these invoices already marked as paid?
They were already marked as paid, but they weren't paid.
So were you, you know, I don't know, were you
siphoning money off into another account through Square, because that was another part.
Like if you don't have access to all your Square, to your Stripe, to your merchantservices, and someone else does, and you own the company, get them off of it.
(10:01):
Get them off of it.
Don't even have me on it.
Have my own login, a guest access.
That's your biggest, I don't care who you know and who you trust.
If you own the company, you're the only one that should have access to where that moneygoes in and out.
That's it.
Yep.
And it's funny, you helped somebody get a new bank account set up and before the bankaccount manager who was opening the account could finish the question, do you want anybody
(10:35):
else adding to the...
No!
Nobody else immediately caught him off.
It was great.
But that's the thing, you need to have control and ownership.
But when you are hiring help and you are hiring people, make sure it's a professional thatknows what they're doing, not somebody that thinks, I've used QuickBooks before, it
(11:04):
doesn't work.
take the emotion out of it.
Like, don't get me wrong, like we have an amazing team.
I love our team.
So the first time I talk with somebody when we're onboarding somebody, whether it's ourteam or a client, I check the energy.
If that energy doesn't match, I don't care how smart you are.
There's something about your gut.
(11:27):
Know the energy to give it off.
Every time we have onboarded either a client or a team person and I've gone, something'swrong, I don't trust this energy.
I've been right.
Yeah.
Yeah.
Steven gives benefit of the doubt to everybody.
rarely do it.
Rarely ever.
I mean it takes, cause it's not, there's something more there.
(11:51):
I just don't.
If I don't, if my gut says no, it's a no.
Yeah, that's my problem.
I want to believe that people are better than they portray themselves a little bitsometimes.
And there are good people out there.
There's a lot of shit ones too.
(12:11):
it's, you know, and we see it.
I mean, I see it for all the fraud.
You hear about all the fraud.
God, I mean, that just broke my heart.
seeing another, I was like, my God, I really hope I'm wrong.
I really hope it's an innocent mistake.
Unfortunately, I've gone through four sets of payments and all of them have errors.
(12:34):
So.
Probably not.
Or you really have a dumbass person working for you, not my client, the person payingthem.
You really have an idiot doing your ACH processing that they don't know how to add up.
It's one of those.
how hard is it to see an invoice and type that amount that is reflected on the invoice?
(13:00):
Like, I don't get that.
Well, okay, part of it, and this is why I go down this rabbit hole with fraud is, soanother red flag.
When they need to turn a single invoice into from that my client sends, and then on theirend, they create three pages for that one page invoice.
(13:24):
Why do you need that much paperwork?
You're literally creating more paperwork and that...
Anytime someone creates more paperwork, when someone talks too much to me, when they'reoverusing words, that's my sign.
I've never been wrong in that.
If you need to talk and talk and talk and talk to explain something, if you need too muchpaperwork, you're hiding something.
(13:46):
You're hiding your true intent.
Especially if there's a change in behaviour.
If there's a kind of a switch that flips with somebody and they go into verbal diarrhoea.
They're trying to figure out...
Their mouth goes quicker than their brain.
it's trying...
Their brain is trying to figure out how do I get out of this?
(14:09):
So they just start saying...
I think you're wrong, I'm a talker, but when I first get to know somebody, I just sit backand listen and watch and observe.
That's what I do.
Yeah.
to figure it out like, let's size this up.
Let's size the situation up.
So, you know, they turned literally, I have them here, one, two, three, four, five, six,seven, eight, they turned nine invoices into a 36 page document.
(14:38):
36 pages.
Ours was nine invoices, one page.
Totally lost on that.
well, and I know that this is a common, not a common example.
This one client in particular has common or recurring issues I want to say where there'salways something that because at the root cause was really bad intent from somebody that's
(15:12):
that's messed him up and the business for a long time and You're essentially gardening andweeding out all these issues and it's like my gosh.
There's another one.
There's another one
Yeah.
And the thing is this fraud, we're talking about this, like, this is like, okay, this isintentional fraud, right?
(15:32):
There's also people and we see it often because we're constantly onboarding, which isamazing.
Unfortunately, when we onboard nine out of 10 times, we have a client going, well, we'vedone our own bookkeeping.
And I now explain it as I don't explain it as errors anymore.
(15:52):
I tell them
You may not realize it, but you filed their taxes based on this because they know how todo taxes too.
God help me.
And you've committed fraud.
may not have.
Listen, fraud intent or with intention or not is still fraud.
So you may not have realized it.
(16:13):
You may not have had the attention of it, but that's fraudulent.
the way you did it and then we explain why and they just sit there.
You've seen it.
They sit there and they're like, and then they try to backpedal and I'm like, it's done.
It's over with.
So I'm letting you know why this is fraudulent and then what we're doing going forwardbecause this can't exist anymore.
(16:36):
And then they explain to you that what you do is simple, but they've been doing it wrongthe whole time.
And I can't believe-
simple for me, but I've done it for 30 years.
So I'm glad that you think it's simple for me.
But if you think it's simple for you, you've lost your mind.
Yeah, I remember that comment.
(16:56):
Yeah, I can't believe I blew up like that because I didn't get aggressive.
I got a little bit confrontational and a little...
I don't know.
very defensive because you know my headaches every day.
I'm getting to the point where I'm tired of people not valuing the work that we do.
(17:21):
And if people think that it's as simple as categorizing expenses and that they can putstuff anywhere just to get, you know, get an uncategorized asset set up.
See, Mary's twitching, getting Vietnam flashbacks.
Yeah.
(17:42):
So like, it's ridiculous.
Get help.
things that you're going to trigger.
The thing is also is you've done your books wrong the entire time.
So then me and your taxes, because you've been doing your own taxes or just sending, justsending your paperwork and go and I to your tax preparer, your accountant, your CPA,
(18:09):
whoever's doing it and go and know I vouch for those numbers so that the accountant willtell you if you're doing your own stuff, you're saying that you sent this to me.
I don't audit it, this is all your responsibility.
And that's fine too.
The problem is, that when you go, okay, now I want to do it right, you're now sending atrigger to the IRS.
Because everything's changed.
(18:32):
Well, the other thing is they don't realize the body of work that goes into fixing themistakes from an accounting standpoint.
Because that means that you've got to go back through all the books, redo everything,recategorize.
That changes all the financial statements and all the taxes, all their upcoming documents.
(18:55):
There's a lot of work that goes into it.
So you're going to have to pay the piper at that point.
It's not
that easy.
Yeah.
Let's talk.
Yeah.
I know you're getting into like, into the next part, but leading into that, the, one ofthe problems is that this tends to happen because there is not structure in place.
(19:27):
There is not things set up and you just started a business and went running and went,okay, we started a business.
Let's make all this happen.
And so you don't have any processes set up.
that's something that we're bringing on, you know, business coaching.
business services, you don't have admin help.
That's something else we're launching.
You need an admin.
(19:47):
You need certain things.
So this isn't just, Hey, I want to do a business.
I'm going to start one.
You need to really think about what that looks like.
What does that look like?
Where's the money coming from?
How are you supporting it?
Who's doing what you can't do everything.
You can't do it.
I can't do my job, let alone all the other crap I've to do.
(20:08):
That's why we have a team.
That's why we that's why Steven has his stuff and I have my stuff and everybody has theirlane and they stay in it.
But you got to think and map all that out.
That's what gets you into trouble.
Because then then you go, I'm too far deep in this hole.
And then you just are trusting anybody that seems to be like, let me help you out.
Let me help you out.
(20:28):
And then you're screwed.
Because you're overwhelmed and you've given access to them because you're too overwhelmedto deal with it.
So take care of everything and the next thing you know, you're being screwed out of whatyou've worked hard to earn.
And may not even be financially, it could be just data.
You could have been data formed, you could have been prevented the access from your data.
(20:54):
And then, you you're starting from square one again.
you know, people just setting up spreadsheets and thinking they could just run a businessthrough a spreadsheet.
Those days aren't there anymore.
The first off, it's extremely inefficient because the software out there
(21:14):
that pulls in bank statements and does all of that and makes life easier.
So why would you, Mr.
I don't know, car detailer, why would you spend three hours in a spreadsheet rather thanletting software do it and you don't know what you're doing so you just kind of make a
(21:39):
mess of it.
So, get help.
citing yourself.
I mean, I don't do my own nails.
I don't do my own hair.
I mean, why would I?
That's not what I...
It shows that you don't do your own hair.
It's why would you waste time in it?
(21:59):
And you're thinking you're saving money.
At the end, it's costing you more because you're going to need someone to fix it andyou're going to pay the pretty penny for it.
you're going to pay a pretty penny for it.
you've, you know, you've just cost yourself more in the end.
There's always the sticker shock.
(22:20):
And I try and let people know as we get into the discussion, it's like, you wouldessentially be paying for an accountant as you go, or you're gonna get hit all at one time
and it's gonna hurt.
We really do our best to take care of people, probably to our detriment.
(22:43):
not probably.
It's definitely to our detriment.
I mean, I love what we do, good God, sometimes it's just like, I take technology breaks,you know that, I'm just done.
Everything is muted, silence turned off.
just, nothing.
Can't handle it.
Yeah.
(23:04):
It's a problem.
But realistically, there's so many different ways of being defrauded.
I got scammed for tickets before, you know, it happens to everybody.
The thing is, once bitten twice shy is a real thing.
You definitely want to that approach.
(23:28):
Here's something...
those internal controls.
You know, they want, they want the, want to make sure that you know what is happening.
You want to make sure that trust your gut, take the time to figure it out, take the timeto assess the situation because if something doesn't feel right, something's wrong.
(23:52):
Nine times out of 10.
Speaking of something wrong, payroll fraud.
If somebody is trying to buy a new house, buy a building, get credit somehow.
I mean, you've encountered it in court cases and stuff, haven't you?
(24:16):
With alimony and all types of stuff where people have gone in
said that they make X amount of money and it completely backfires on them when and one iswe know it's not true but also the results and the cascaded domino effect of what happens
so
Well, we've also assessed businesses, you know, when we're potentially, when someone'spotentially buying a new business and we examine that.
(24:43):
If you own the company and you say it's payroll, then you need to show me a W-2.
Otherwise it's just an owner withdrawal.
Like there's that, like, and that, and people don't understand that, but if you don't havebasis in your company, meaning you've taken out more than what you've contributed,
(25:04):
Well, then you should be paying taxes on that.
And that's payroll fraud.
Because you're not recording your draws.
You're not reporting it.
Now, if you have a positive, then you're good.
I mean, payroll is W-2.
That's what payroll is.
Payroll is running it.
Otherwise, you have 1099s.
If you have 1099s, deaf paying consultant, deaf paying contractor.
(25:29):
You may not like that.
mean, people do not like that I'm that exact, but guess what?
That's the truth.
Because if you are running payroll for a 1099 and they're working 30 hours a week, you'retelling them when they have to show up, when they leave, what they, what they need to do.
All, all those things, guess what?
They're not a 1099 in the federal or state government outlook.
(25:53):
They are a W-2 employee.
I don't care if you pay them 1099.
They are classified as a W-2.
And then what you're going to pay, you're going to end up having to pay all these backyear taxes for employment.
Then there's the workers comp.
There's all of the other stuff.
Yep.
realize it.
Oh, I know you did know our people know because we've told them we've sent out letterssaying, hey, you you've got to be there.
(26:20):
A company where we're hands off or your W-2.
You know what a part of the problem is that you just explained?
That sounds a lot like traditional accounting, Mary.
Yes.
Yeah, traditional.
Yeah, traditional.
I'm funny that way.
known as legal.
(26:40):
Legal, illegal.
There's no grey area with this.
Yeah.
Gosh.
Gotta love them.
Okay, so as we've kind of discussed, structure is massive.
(27:01):
hiring a professional that knows what they're doing and has shown that they know whatthey're doing is a big thing.
Obviously you can look at more segregation of duties between employees, basically dividingthe labour so that no one person has too much access.
(27:21):
That's one of good ways of doing it.
But again, I said it earlier in the podcast, Mary's a
the best at what she does with forensic audits.
Having a regular audit schedule is a good idea.
Especially if you want to protect yourself and if you think you've hired people thataren't as trustworthy as they should have been.
(27:49):
But even if we go digging and we find nothing, you may think you've wasted money there butyou really haven't because what you've done is you've given yourself a peace of mind.
that nothing was wrong, nothing's happened there.
And I think that's arguably why you hire professionals, whether it's legal, or even in thetrades, you hire a plumber so that they do the repiping, install a toilet, because if you
(28:19):
do it, you're always gonna have that lingering thing in your head of thinking, no, am Igonna have water spraying somewhere when it shouldn't?
And it's like that piece of mine is huge and important.
So
What do you think?
What other areas?
Well, think the only other thing to mention is that you're always going to have somebody,bad people are going to exist.
(28:46):
That's just part of life.
doing all those things, segregation of duties and your gut and making sure that there'snot too much access and having strong internal controls, all that.
Also, it's not a good environment.
If you're treating people like crap, you're probably going to get screwed at some point.
(29:08):
I mean, I'll walk away if I'm done.
You cause an issue with me that you're consistently treating me like crap or lying to meas a client or an employee or a contractor.
We're done.
That doesn't go on.
I do not play that game.
Treat people nice.
It doesn't cost you anything.
(29:29):
It actually gives you years to your life.
Just be nice.
It's not that hard.
Say thank you.
to the people that work for you and that work with you to tell them thanks.
literally, Steven and I literally don't end a phone call ever without going, okay, loveyou, bye, every single time.
(29:51):
Like, I don't know how many years, I started thinking about that the other day.
But we also say thank you for everything both of each other, we do.
And we thank our team all the time.
We say it on here too.
But it doesn't, I mean,
We couldn't do it.
I couldn't do it without everybody that we have working with us.
(30:11):
There's no way.
toll all of this takes we could not do it alone.
I don't know how Mary's, I do know how Mary's done it without me for so long.
She's had a team around her but it's been in a different capacity whether it's been Joy,old Joy, whether it's been Dina, whether it's been Carla, whoever it is they've been that
(30:35):
support system and I'm grateful for them because I don't know how I'm gonna deal with thismoving forward.
because there was a time this week where you didn't...
Yeah, they did.
But you didn't say love you bye one time this week and that, you know, hit me.
No, I'm joking.
No, I will say there have been times there's been a couple times where I haven't I don'tknow him right now, but I'll text it
(31:00):
Yeah, yeah, and I'll just say fair enough.
Yeah, fair enough.
I mean, really just I mean, if you can't be nice to the people around you, you probablyare not being nice to yourself.
So start working on that.
You're opening yourself up to potential fraud.
Because if people don't like you and don't like the way you operate, they won't feel badabout skimming off a register or, you know, doing stuff.
(31:27):
Like, ultimately, yeah.
Yeah.
But, yeah.
There's people out there.
We are rare people, so we'll just go deuces.
Well, you'll give them a thousand chances.
I just go deuces.
But yeah, toodles.
Just, I mean, be nice.
(31:48):
If you're not nice, be nice to yourself.
Start with yourself, love yourself.
I love me.
I say it all the time.
I love me some Mary.
A lot of people say that to you.
People that we work with obviously is what we hear in clients but here's what I would kindof finish with is when was the last time you, whoever's listening to this, really looked
(32:15):
at your business, looked at your situation and truly knew where you were financially, youknow, in your business knew
everything to the tee.
If you haven't done an audit in a while, definitely worth looking into especially with allthe stuff that's going on in the world.
Assess your current situation, does somebody have too much access, you know what company,cards are out there, all these different things.
(32:45):
Like you definitely want to self-evaluate and have somebody come and do an evaluation foryou.
Like having
Having a third party do an audit is probably always a good thing because they're unbiased.
If you have a controller do it for you, they might fudge the numbers, be fraudulent.
(33:09):
You know, I'm not saying everybody will do that, but it's happened.
It will happen, continue to happen.
But there's ways around it.
If anybody wants to schedule a consultation with us where we can run a few...
run through a few options.
I'll my teeth back in today after this, don't Then let us know.
(33:35):
You can go to peacelovebiz.com or call 844-Piece20.
We'll be happy to talk to you, see what we can do to help.
I'll offer you that peace of mind, that security so that you can sleep at night ratherthan wonder if somebody's taking off the top.
Because that lord knows nobody's taking off the top of my head.
It's all gone.
(33:56):
gone.
Yeah, final thoughts, Mary.
five days.
So if you need an extension, get ahold of us.
We'll get an extension in for you.
Ain't happening before then, but the extension will happen.
Yep.
Take some time, love yourself, be nice to people.
That's what I got.
(34:17):
Yeah, and if you think this was valuable to you, share it with any business owners thatyou know.
We appreciate you.
Like, subscribe, all that stuff.
But yeah, go to peacelovebiz.com, schedule your session.
And yeah, we'll be there to help.
So, until next time, have a peaceful week.
(34:40):
I will try to.
Mary will not.
We have several other ventures that we're working on which may help us through everythingelse.
Yeah, but yeah, we'll get there.
Until next time, we will see you later.
Thank you.
Hey guys, welcome to another episode of Peace Love Biz.
I'm your host Steve Higgins and we're joined by Mary Roach, the chief headbanger Miss HelpMe Help You.
Deep in the heart of tax season, running into a lot of...
I don't know if you want to call them problem clients, but people that don't understandtime of year and things that are going on.
(00:30):
But yeah, how are you doing?
at Christmas that the 25th is two days away.
They're aware.
They know.
I started laughing.
I apologize.
I started laughing because you said deep in the heart and then you said taxes and in myhead I was like, why are we in Texas?
Deep in the heart of...
(00:51):
Yeah, just rearrange the letters and you're right there, aren't you?
I'm like, where does he come with this?
Yeah, so I have a question this week.
How are you doing?
I, I feel disheveled, I feel stressed, but I actually feel really good today.
(01:14):
it's, I kind of reset a little bit and regrouped and I think that we're doing good thing.
Well, I know that we're doing good things, but we are definitely in productive mode.
I've done some really good meetings with people that have really
realigned and refocused my target and what I'm trying to do.
(01:38):
So I think we're in a good place.
So what about you?
I'm surviving.
for everybody out there listening, this is Stephen's first real tax year, tax season withme.
And I asked him because I typically do have a total slip and meltdown at some point and Ihad it and it was bad.
(02:02):
And Stephen was like, my God, this is actually real.
Yeah, and I was trying to be as supp-
it with me.
I was trying to be as supportive as I could be without showing my fear, own insecuritieswith the whole thing and I'm like, we could do this, we could do this.
(02:26):
I was essentially had a, I don't know what you call it, a paper bag in my own head, likein and out, in and out.
But yeah.
I think we got through the other end, we're just taking it one thing at a time, one returnat a time, one, one thing at a time.
(02:49):
Um, yeah.
you know, all you can do is just one thing at a time.
No more than that.
We're only human.
I mean, we're amazing, but we're only human.
commitment to ensuring that it is not a tax year and it is just the tax season is real forus so we're doing everything we can for that but today's topic
(03:14):
April 30th is going to be my deadline, but still better than an entire year.
Yeah, exactly.
you know, we'll still have those people that have come that come to us in July saying,hey, you need to file taxes.
And we'll be happy to help because if anybody does need any help with tax filing, thenyou're welcome to reach out.
(03:37):
We'll file extensions and stuff.
So go to peace of biz dot com and put a contact form in.
We'll get back to you pretty quickly.
But yeah, it's never too late to ask for help.
So definitely take advantage of that.
Today's topic though is going to be a fun one.
Because there's a few things to touch on around fraud and fraud as you guys say inAmerica.
(04:04):
Fraud.
Kind of like frog with a D is how I have to think about it when I say it.
And then that just makes me think of ribbits and stuff.
Never mind.
Anyway, yeah, so how to protect small businesses from fraud.
(04:25):
And now I can't stop thinking about how I say that.
So there's a few things we're to touch on.
Definitely from more of an educational standpoint, how to protect yourselves, how to makesure you don't get caught in traps and things like that.
Obviously getting a professional to take care of
(04:47):
your books, take care of your accounting side is always going to help protect you.
But Mary is a master of forensic auditing and forensic accounting.
Some of the stuff she picks up on is insane.
This week in particular, do we want to just dive in and just talk a little bit about thisone?
(05:14):
So one of the
One of the common types of fraud that people experience is invoice fraud.
you know, there's vendors that are gonna pay people and sometimes the numbers won't matchup.
And that's what's happened this week with one of our clients.
(05:35):
And thankfully Mary's the one that's gone through and has been like, I can't make sense ofthis.
Why is this not adding up?
and Mary's obviously done what she does and figures out what's going on so do you want todive in a little bit on that?
Yeah, so, you know, first thing is, you know, just don't take someone's word for it.
(05:58):
If they say the total thing that they're sending is $12,000 and they say these are all theinvoices, you know, make sure they add up.
Don't just assume it.
Like go through, make sure that the invoice that they're paying, if they're payingmultiple invoices, five, six invoices, and they're listing them, make sure that their
(06:18):
number on their invoice
that they're sending over for ribbittons matches the one that you originally sent them.
That's number one.
that's for starters.
Number two.
you know, if, if it is, you gotta look at that stuff.
Cause it's really easy to just click and go, okay.
(06:40):
It's fine.
And then at the end, doesn't add up.
So they may have all the numbers there, but the total is really 15,000, not 12,000.
There there's another, there's another thing.
There's another error.
There's a, another red flag.
The problem becomes is in this case.
There were, God, I'm trying to think.
(07:03):
There was a difference of like close to two grand.
And then I went into the next thing from the next client or from the same client, theirnext payment.
And none of the invoice numbers, first of all, there wasn't the correct invoice numbers ormissing numbers from the invoice.
And then the amounts were off.
(07:27):
Then I go to the next one and just kept repeating.
So now I've got to go through these, the deposits I have for this year, double checkeverything, redo it.
And then I've got to do a whole audit on them for the last two years because in thissituation we've already had embezzlement and payroll fraud from hired help.
(07:52):
So now we're going down a rabbit hole of a second time of fraud.
and it just, I mean, I love what I do.
just, that one client, he has a heart of gold and now I'm like, damn, again?
Like, you know, there's just pay attention, like just the smallest things you may thinkit's nothing.
(08:15):
It's everything.
It's everything.
it is and it snowballs.
Like, like you said, it was just the same, the instance on one invoice and then the nextone.
And then it, it builds that case and the pattern for that vendor.
It's like, okay, how long has he worked with that vendor?
How long has that person then been essentially screwed out of X amount of money?
(08:44):
And what is the result of that?
It could.
I have to go bigger because we've already had an existing case where the the person thatwas getting this was supposed before I came along, they were doing this.
They were recording the payments and then I just match up on the banking side of it.
And now I'm like, you know, I hate thinking it.
(09:05):
I hate thinking the worst because when I do, I'm normally right.
That's the problem.
Like I.
Usually right and everything that I say I know because I don't go outside my lane.
I don't jump into things.
I'm not good at so I look at it and go I really think this has been going on a while andshe could have been doing it because even that I'm going through payments and I'm like,
(09:34):
how were these invoices already marked as paid?
They were already marked as paid, but they weren't paid.
So were you, you know, I don't know, were you
siphoning money off into another account through Square, because that was another part.
Like if you don't have access to all your Square, to your Stripe, to your merchantservices, and someone else does, and you own the company, get them off of it.
(10:01):
Get them off of it.
Don't even have me on it.
Have my own login, a guest access.
That's your biggest, I don't care who you know and who you trust.
If you own the company, you're the only one that should have access to where that moneygoes in and out.
That's it.
Yep.
And it's funny, you helped somebody get a new bank account set up and before the bankaccount manager who was opening the account could finish the question, do you want anybody
(10:35):
else adding to the...
No!
Nobody else immediately caught him off.
It was great.
But that's the thing, you need to have control and ownership.
But when you are hiring help and you are hiring people, make sure it's a professional thatknows what they're doing, not somebody that thinks, I've used QuickBooks before, it
(11:04):
doesn't work.
take the emotion out of it.
Like, don't get me wrong, like we have an amazing team.
I love our team.
So the first time I talk with somebody when we're onboarding somebody, whether it's ourteam or a client, I check the energy.
If that energy doesn't match, I don't care how smart you are.
There's something about your gut.
(11:27):
Know the energy to give it off.
Every time we have onboarded either a client or a team person and I've gone, something'swrong, I don't trust this energy.
I've been right.
Yeah.
Yeah.
Steven gives benefit of the doubt to everybody.
rarely do it.
Rarely ever.
I mean it takes, cause it's not, there's something more there.
(11:51):
I just don't.
If I don't, if my gut says no, it's a no.
Yeah, that's my problem.
I want to believe that people are better than they portray themselves a little bitsometimes.
And there are good people out there.
There's a lot of shit ones too.
(12:11):
it's, you know, and we see it.
I mean, I see it for all the fraud.
You hear about all the fraud.
God, I mean, that just broke my heart.
seeing another, I was like, my God, I really hope I'm wrong.
I really hope it's an innocent mistake.
Unfortunately, I've gone through four sets of payments and all of them have errors.
(12:34):
So.
Probably not.
Or you really have a dumbass person working for you, not my client, the person payingthem.
You really have an idiot doing your ACH processing that they don't know how to add up.
It's one of those.
how hard is it to see an invoice and type that amount that is reflected on the invoice?
(13:00):
Like, I don't get that.
Well, okay, part of it, and this is why I go down this rabbit hole with fraud is, soanother red flag.
When they need to turn a single invoice into from that my client sends, and then on theirend, they create three pages for that one page invoice.
(13:24):
Why do you need that much paperwork?
You're literally creating more paperwork and that...
Anytime someone creates more paperwork, when someone talks too much to me, when they'reoverusing words, that's my sign.
I've never been wrong in that.
If you need to talk and talk and talk and talk to explain something, if you need too muchpaperwork, you're hiding something.
(13:46):
You're hiding your true intent.
Especially if there's a change in behaviour.
If there's a kind of a switch that flips with somebody and they go into verbal diarrhoea.
They're trying to figure out...
Their mouth goes quicker than their brain.
it's trying...
Their brain is trying to figure out how do I get out of this?
(14:09):
So they just start saying...
I think you're wrong, I'm a talker, but when I first get to know somebody, I just sit backand listen and watch and observe.
That's what I do.
Yeah.
to figure it out like, let's size this up.
Let's size the situation up.
So, you know, they turned literally, I have them here, one, two, three, four, five, six,seven, eight, they turned nine invoices into a 36 page document.
(14:38):
36 pages.
Ours was nine invoices, one page.
Totally lost on that.
well, and I know that this is a common, not a common example.
This one client in particular has common or recurring issues I want to say where there'salways something that because at the root cause was really bad intent from somebody that's
(15:12):
that's messed him up and the business for a long time and You're essentially gardening andweeding out all these issues and it's like my gosh.
There's another one.
There's another one
Yeah.
And the thing is this fraud, we're talking about this, like, this is like, okay, this isintentional fraud, right?
(15:32):
There's also people and we see it often because we're constantly onboarding, which isamazing.
Unfortunately, when we onboard nine out of 10 times, we have a client going, well, we'vedone our own bookkeeping.
And I now explain it as I don't explain it as errors anymore.
(15:52):
I tell them
You may not realize it, but you filed their taxes based on this because they know how todo taxes too.
God help me.
And you've committed fraud.
may not have.
Listen, fraud intent or with intention or not is still fraud.
So you may not have realized it.
(16:13):
You may not have had the attention of it, but that's fraudulent.
the way you did it and then we explain why and they just sit there.
You've seen it.
They sit there and they're like, and then they try to backpedal and I'm like, it's done.
It's over with.
So I'm letting you know why this is fraudulent and then what we're doing going forwardbecause this can't exist anymore.
(16:36):
And then they explain to you that what you do is simple, but they've been doing it wrongthe whole time.
And I can't believe-
simple for me, but I've done it for 30 years.
So I'm glad that you think it's simple for me.
But if you think it's simple for you, you've lost your mind.
Yeah, I remember that comment.
(16:56):
Yeah, I can't believe I blew up like that because I didn't get aggressive.
I got a little bit confrontational and a little...
I don't know.
very defensive because you know my headaches every day.
I'm getting to the point where I'm tired of people not valuing the work that we do.
(17:21):
And if people think that it's as simple as categorizing expenses and that they can putstuff anywhere just to get, you know, get an uncategorized asset set up.
See, Mary's twitching, getting Vietnam flashbacks.
Yeah.
(17:42):
So like, it's ridiculous.
Get help.
things that you're going to trigger.
The thing is also is you've done your books wrong the entire time.
So then me and your taxes, because you've been doing your own taxes or just sending, justsending your paperwork and go and I to your tax preparer, your accountant, your CPA,
(18:09):
whoever's doing it and go and know I vouch for those numbers so that the accountant willtell you if you're doing your own stuff, you're saying that you sent this to me.
I don't audit it, this is all your responsibility.
And that's fine too.
The problem is, that when you go, okay, now I want to do it right, you're now sending atrigger to the IRS.
Because everything's changed.
(18:32):
Well, the other thing is they don't realize the body of work that goes into fixing themistakes from an accounting standpoint.
Because that means that you've got to go back through all the books, redo everything,recategorize.
That changes all the financial statements and all the taxes, all their upcoming documents.
(18:55):
There's a lot of work that goes into it.
So you're going to have to pay the piper at that point.
It's not
that easy.
Yeah.
Let's talk.
Yeah.
I know you're getting into like, into the next part, but leading into that, the, one ofthe problems is that this tends to happen because there is not structure in place.
(19:27):
There is not things set up and you just started a business and went running and went,okay, we started a business.
Let's make all this happen.
And so you don't have any processes set up.
that's something that we're bringing on, you know, business coaching.
business services, you don't have admin help.
That's something else we're launching.
You need an admin.
(19:47):
You need certain things.
So this isn't just, Hey, I want to do a business.
I'm going to start one.
You need to really think about what that looks like.
What does that look like?
Where's the money coming from?
How are you supporting it?
Who's doing what you can't do everything.
You can't do it.
I can't do my job, let alone all the other crap I've to do.
(20:08):
That's why we have a team.
That's why we that's why Steven has his stuff and I have my stuff and everybody has theirlane and they stay in it.
But you got to think and map all that out.
That's what gets you into trouble.
Because then then you go, I'm too far deep in this hole.
And then you just are trusting anybody that seems to be like, let me help you out.
Let me help you out.
(20:28):
And then you're screwed.
Because you're overwhelmed and you've given access to them because you're too overwhelmedto deal with it.
So take care of everything and the next thing you know, you're being screwed out of whatyou've worked hard to earn.
And may not even be financially, it could be just data.
You could have been data formed, you could have been prevented the access from your data.
(20:54):
And then, you you're starting from square one again.
you know, people just setting up spreadsheets and thinking they could just run a businessthrough a spreadsheet.
Those days aren't there anymore.
The first off, it's extremely inefficient because the software out there
(21:14):
that pulls in bank statements and does all of that and makes life easier.
So why would you, Mr.
I don't know, car detailer, why would you spend three hours in a spreadsheet rather thanletting software do it and you don't know what you're doing so you just kind of make a
(21:39):
mess of it.
So, get help.
citing yourself.
I mean, I don't do my own nails.
I don't do my own hair.
I mean, why would I?
That's not what I...
It shows that you don't do your own hair.
It's why would you waste time in it?
(21:59):
And you're thinking you're saving money.
At the end, it's costing you more because you're going to need someone to fix it andyou're going to pay the pretty penny for it.
you're going to pay a pretty penny for it.
you've, you know, you've just cost yourself more in the end.
There's always the sticker shock.
(22:20):
And I try and let people know as we get into the discussion, it's like, you wouldessentially be paying for an accountant as you go, or you're gonna get hit all at one time
and it's gonna hurt.
We really do our best to take care of people, probably to our detriment.
(22:43):
not probably.
It's definitely to our detriment.
I mean, I love what we do, good God, sometimes it's just like, I take technology breaks,you know that, I'm just done.
Everything is muted, silence turned off.
just, nothing.
Can't handle it.
Yeah.
(23:04):
It's a problem.
But realistically, there's so many different ways of being defrauded.
I got scammed for tickets before, you know, it happens to everybody.
The thing is, once bitten twice shy is a real thing.
You definitely want to that approach.
(23:28):
Here's something...
those internal controls.
You know, they want, they want the, want to make sure that you know what is happening.
You want to make sure that trust your gut, take the time to figure it out, take the timeto assess the situation because if something doesn't feel right, something's wrong.
(23:52):
Nine times out of 10.
Speaking of something wrong, payroll fraud.
If somebody is trying to buy a new house, buy a building, get credit somehow.
I mean, you've encountered it in court cases and stuff, haven't you?
(24:16):
With alimony and all types of stuff where people have gone in
said that they make X amount of money and it completely backfires on them when and one iswe know it's not true but also the results and the cascaded domino effect of what happens
so
Well, we've also assessed businesses, you know, when we're potentially, when someone'spotentially buying a new business and we examine that.
(24:43):
If you own the company and you say it's payroll, then you need to show me a W-2.
Otherwise it's just an owner withdrawal.
Like there's that, like, and that, and people don't understand that, but if you don't havebasis in your company, meaning you've taken out more than what you've contributed,
(25:04):
Well, then you should be paying taxes on that.
And that's payroll fraud.
Because you're not recording your draws.
You're not reporting it.
Now, if you have a positive, then you're good.
I mean, payroll is W-2.
That's what payroll is.
Payroll is running it.
Otherwise, you have 1099s.
If you have 1099s, deaf paying consultant, deaf paying contractor.
(25:29):
You may not like that.
mean, people do not like that I'm that exact, but guess what?
That's the truth.
Because if you are running payroll for a 1099 and they're working 30 hours a week, you'retelling them when they have to show up, when they leave, what they, what they need to do.
All, all those things, guess what?
They're not a 1099 in the federal or state government outlook.
(25:53):
They are a W-2 employee.
I don't care if you pay them 1099.
They are classified as a W-2.
And then what you're going to pay, you're going to end up having to pay all these backyear taxes for employment.
Then there's the workers comp.
There's all of the other stuff.
Yep.
realize it.
Oh, I know you did know our people know because we've told them we've sent out letterssaying, hey, you you've got to be there.
(26:20):
A company where we're hands off or your W-2.
You know what a part of the problem is that you just explained?
That sounds a lot like traditional accounting, Mary.
Yes.
Yeah, traditional.
Yeah, traditional.
I'm funny that way.
known as legal.
(26:40):
Legal, illegal.
There's no grey area with this.
Yeah.
Gosh.
Gotta love them.
Okay, so as we've kind of discussed, structure is massive.
(27:01):
hiring a professional that knows what they're doing and has shown that they know whatthey're doing is a big thing.
Obviously you can look at more segregation of duties between employees, basically dividingthe labour so that no one person has too much access.
(27:21):
That's one of good ways of doing it.
But again, I said it earlier in the podcast, Mary's a
the best at what she does with forensic audits.
Having a regular audit schedule is a good idea.
Especially if you want to protect yourself and if you think you've hired people thataren't as trustworthy as they should have been.
(27:49):
But even if we go digging and we find nothing, you may think you've wasted money there butyou really haven't because what you've done is you've given yourself a peace of mind.
that nothing was wrong, nothing's happened there.
And I think that's arguably why you hire professionals, whether it's legal, or even in thetrades, you hire a plumber so that they do the repiping, install a toilet, because if you
(28:19):
do it, you're always gonna have that lingering thing in your head of thinking, no, am Igonna have water spraying somewhere when it shouldn't?
And it's like that piece of mine is huge and important.
So
What do you think?
What other areas?
Well, think the only other thing to mention is that you're always going to have somebody,bad people are going to exist.
(28:46):
That's just part of life.
doing all those things, segregation of duties and your gut and making sure that there'snot too much access and having strong internal controls, all that.
Also, it's not a good environment.
If you're treating people like crap, you're probably going to get screwed at some point.
(29:08):
I mean, I'll walk away if I'm done.
You cause an issue with me that you're consistently treating me like crap or lying to meas a client or an employee or a contractor.
We're done.
That doesn't go on.
I do not play that game.
Treat people nice.
It doesn't cost you anything.
(29:29):
It actually gives you years to your life.
Just be nice.
It's not that hard.
Say thank you.
to the people that work for you and that work with you to tell them thanks.
literally, Steven and I literally don't end a phone call ever without going, okay, loveyou, bye, every single time.
(29:51):
Like, I don't know how many years, I started thinking about that the other day.
But we also say thank you for everything both of each other, we do.
And we thank our team all the time.
We say it on here too.
But it doesn't, I mean,
We couldn't do it.
I couldn't do it without everybody that we have working with us.
(30:11):
There's no way.
toll all of this takes we could not do it alone.
I don't know how Mary's, I do know how Mary's done it without me for so long.
She's had a team around her but it's been in a different capacity whether it's been Joy,old Joy, whether it's been Dina, whether it's been Carla, whoever it is they've been that
(30:35):
support system and I'm grateful for them because I don't know how I'm gonna deal with thismoving forward.
because there was a time this week where you didn't...
Yeah, they did.
But you didn't say love you bye one time this week and that, you know, hit me.
No, I'm joking.
No, I will say there have been times there's been a couple times where I haven't I don'tknow him right now, but I'll text it
(31:00):
Yeah, yeah, and I'll just say fair enough.
Yeah, fair enough.
I mean, really just I mean, if you can't be nice to the people around you, you probablyare not being nice to yourself.
So start working on that.
You're opening yourself up to potential fraud.
Because if people don't like you and don't like the way you operate, they won't feel badabout skimming off a register or, you know, doing stuff.
(31:27):
Like, ultimately, yeah.
Yeah.
But, yeah.
There's people out there.
We are rare people, so we'll just go deuces.
Well, you'll give them a thousand chances.
I just go deuces.
But yeah, toodles.
Just, I mean, be nice.
(31:48):
If you're not nice, be nice to yourself.
Start with yourself, love yourself.
I love me.
I say it all the time.
I love me some Mary.
A lot of people say that to you.
People that we work with obviously is what we hear in clients but here's what I would kindof finish with is when was the last time you, whoever's listening to this, really looked
(32:15):
at your business, looked at your situation and truly knew where you were financially, youknow, in your business knew
everything to the tee.
If you haven't done an audit in a while, definitely worth looking into especially with allthe stuff that's going on in the world.
Assess your current situation, does somebody have too much access, you know what company,cards are out there, all these different things.
(32:45):
Like you definitely want to self-evaluate and have somebody come and do an evaluation foryou.
Like having
Having a third party do an audit is probably always a good thing because they're unbiased.
If you have a controller do it for you, they might fudge the numbers, be fraudulent.
(33:09):
You know, I'm not saying everybody will do that, but it's happened.
It will happen, continue to happen.
But there's ways around it.
If anybody wants to schedule a consultation with us where we can run a few...
run through a few options.
I'll my teeth back in today after this, don't Then let us know.
(33:35):
You can go to peacelovebiz.com or call 844-Piece20.
We'll be happy to talk to you, see what we can do to help.
I'll offer you that peace of mind, that security so that you can sleep at night ratherthan wonder if somebody's taking off the top.
Because that lord knows nobody's taking off the top of my head.
It's all gone.
(33:56):
gone.
Yeah, final thoughts, Mary.
five days.
So if you need an extension, get ahold of us.
We'll get an extension in for you.
Ain't happening before then, but the extension will happen.
Yep.
Take some time, love yourself, be nice to people.
That's what I got.
(34:17):
Yeah, and if you think this was valuable to you, share it with any business owners thatyou know.
We appreciate you.
Like, subscribe, all that stuff.
But yeah, go to peacelovebiz.com, schedule your session.
And yeah, we'll be there to help.
So, until next time, have a peaceful week.
(34:40):
I will try to.
Mary will not.
We have several other ventures that we're working on which may help us through everythingelse.
Yeah, but yeah, we'll get there.
Until next time, we will see you later.
Thank you.
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