My Client’s Payment Was Sent WHERE?

It’s always exciting to get a windfall- a spike in your business that can increase your profit. However, I’ve dealt with several business owners who have been taken advantage of during times like these.
Here’s an example: Bob runs a tree service business in metro St. Louis. He runs a yellow pages ad, takes calls from prospects and schedules work. He has several crews of employees that perform the work. Bob has recently hired a new foreman, Carl, to manage one of the crews.
A large storm moves through a nearby town, causing extensive tree damage. Bob dispatches Carl and a crew to the town, with instructions to bid on work and get it completed. Bob remains in metro St. Louis to manage “normal” operations. After 30 days, most of the cleanup efforts in the nearby town are complete. Bob’s crews tell him about many jobs that were performed there. Carl, the foreman, decides to leave Bob’s company shortly after the storm cleanup.
As time goes on, Bob is surprised that no payments are coming in on Carl’s jobs. He visits the nearby town with some crew members to follow up on payment. Several clients show Bob the invoice they were given- the company name is slightly different from Bob’s firm, and the address is different. Carl has billed clients and cashed checks sent to an address that he controls. Bob has lost all the revenue due to the storm.

The Lesson: Being busy with new clients is good, being really busy is even better. However, business owners should be careful not to delegate too much responsibility to employees. Specifically, keep in mind who has access to cash, invoices and equipment. Be busy, but retain control.