"Are your phones protected against Cyber Attacks" by Steve Marsten

We read frequently about horror stories of individuals having their personal information hacked or the credit cards and email addresses as well as business’s websites hacked. Overall we tend to rely on “other” people to protect our information – but how reliable are those we rely on?

This week I want to highlight an issue that currently lurks in the background of every business – how safe is your phone system? Do you, as the business owner, know the passwords to your ISDN lines? Does your Office Administrator know them? ISDN stands for Integrated Services Digital Network which is the set of communication standards for simultaneous digital transmission of voice, video, data and network services that most businesses will have setup.

If the answer to these questions is “No” then you are relying on your service provider of the phone systems and/or the company who services your phone network. How confident are you that your system is secure?

Our phone company recently rang us to report that the number of calls made from our system had suddenly spiked outside of business hours. The bill arrived soon after - quadrupled its usual size. The service provider was in no hurry to address the matter. Hence we were left to seek an alternative knowledgeable technician willing to assist from Sydney. Over the internet he managed to track the cause to Eastern Block Cyber criminals who managed to hack our network and divert several lines to mobile phones for their personal use making many thousands of dollars worth of calls in a short period of time. (No client data was hacked as the providers here change their security every couple of months.)

We obtained a report on the matter to find that the phone provider used generic passwords that make a Hackers job easy ie: Administrator; Manager; Password! The individual phone lines had passwords. Some lines simply didn’t have passwords and hence were open and available for Hackers to use over the internet.

Many in business would not give this issue a second thought, but at Sothertons it’s our advice to  all business owners - make sure you secure every password from every system you have on a password register. Don’t assume the Phone Company will look after you – they tend not to accept any blame. Perhaps your phone service provider won’t want to know you either. Call us on 4972 1300 to ensure you take the necessary steps to protect your system from any unexpected costs.

The Secret Financial Advantage of being Young by Tina Zawila

This week I had the opportunity to present to 15-25 year olds as part of National Youth Week events co-ordinated by the Gladstone Regional Council.

It was such a privilege for me to be able to share some financial insights with the audience, when they are in the prime of their financial lives!   Now you might think “hang on, if they are only 15-25 years old how can they be in the prime of their financial lives?!?”. 

They have one thing that those of us with a few more years under our belt would give anything for.

They have TIME.

How does Time = Financial Success?  Simple, it’s all in the Power of Compound Interest.

Yep, it’s not rocket science, but it amazes me how many of us do not give it the attention it deserves.

I used a simple example of three people who saved $1,000 per month for 10 years.  In total each of them invested $120,000 over a 10 year period.  We are also going to assume that the interest rates and investment were all exactly the same for each investor over the entire period of the example. 

Michael invested his $1,000 per month when he was aged between 25 and 35.  Jennifer waited until she was 35 to start her 10 year saving plan, and Sam didn’t start until he was 45. 

Each investor saved the money over the 10 year period and then let it sit there until they were each aged 65.

At age 65 Michael’s investment now totalled over $1.4million!  Jennifer turned her $120,000 into just over $730,000.  However, Sam only received $370,000 when he turned 65.  The only difference?  When they started investing. 

From this example you can see how much of a difference it makes to start early!  You might not have $1,000 a month to put aside, but even a small amount put away while you are young will outgrow a larger amount that has a shorter investment time frame.  So get started NOW!

At Sothertons, we are committed to improving your financial position and helping you become financially well-organised. Call our professional team on 4972 1300 and let us help you.

Don’t fear the Financials by Steve Marsten

There are many people in business who are afraid of their numbers and it is quite striking really. Financial Statements can be unknown territory to many business owners and they can be a little intimidating.

Some people have been in business for sometime but still don’t like to actually “look” at their numbers. As long as the cash is hitting the bank account and they are getting paid, they feel everything is going well. Business owners start to get fearful when things start happening that they can’t explain – such as running out of money.

In a recent case I was listening to a client tell me that they feared they were going broke because it had become harder to pay the bills and hence sales “must be” falling. That’s easy to reconcile in this economic climate, however when we took to reviewing their figures we noted that sales had flat lined but were still quite robust.

The issue was they ran their business with the “cash” mentality that is - they purchased an item for $10 and sold it for $20 then they have made $10. However if you buy three things for $10 but only sell one then clearly you are $10 short!

Recording sales on a cash basis only and not on an accrual basis (or Non cash basis where you take into account the people that owe you money and the suppliers you owe money to) often it does not provide the full picture. It doesn’t actually tell you what’s going on in the business. 

The other issue is – if you only look at the bank account to judge the success of your business, you maybe making poor decisions on insufficient information. A business owner recently withdrew several thousand dollars from the business account at the end of the month thinking that they had had a good month. These funds were spent on a personal consumable item. Trouble was when the bookkeeper returned, she brought to the attention of the business owner, several thousand dollars of bills that had not yet been “entered into the system”.

Our solutions to these cases above, was to show our clients the benefit of tracking sales, stock, creditors and debtors using the Xero software and its add-ons. These business owners are now back in control of their businesses and no longer fear the figures. At Sothertons, understanding your financials is about actively driving your business. Call us on 4972 1300

“When the going gets tough…” by Tina Zawila

Following on from Steve’s article on Redundancy last week, I thought I’d also touch on a very relevant subject in our community right now.  Right now, many employees are not being offered a redundancy package, but are instead having their wage rates and salaries reviewed downwards.  In some cases quite significant reductions are being proposed, either in rates and/or in reduced hours/overtime. 

Unfortunately this is the economic cycle we are in at the moment.  However, just because we have been there before, or because we know that we ‘had it good’ for a while, it doesn’t make the downturn any easier.

So what can you do to help yourself if you are facing a decline in your income? 

First and foremost, acknowledge the fact that many people are out of work altogether, so be grateful that you have employment at all.   Changing your thinking to one of gratitude for what you have instead of what you don’t have is a good first step.

However, let’s also be practical…

• It’s time to turn to the family budget and have a good look at what is coming in and what is going out.  Start actually tracking and recording your spending for at least a few weeks so you can then make decisions based on facts, not gut feel.  Don’t ignore the small things – they often add up to big things.  Remember - you can’t manage what you don’t measure, so don’t ignore this step! 
  
  
• Look at your debt commitments – home loan, personal/car loans, and credit cards and consider whether you need to consolidate or renegotiate terms to reduce the repayment burden even if only for a short period of time while you realign your expenses with your new income level.
  
  
• Ask for help!  Contact your financial advisor.  We are qualified and experienced and can provide practical tools and tips to help you manage your personal finances.  Simply talking about your situation with someone who understands can also lift the burden so don’t try to go it alone.

Finally, don’t bury your head in the sand.  Take action.  Get control.  When the going gets tough, the tough get going!  Call the professional team at Sothertons today on 4972 1300.  We are here to help.