So, as always with e-mail problems the first thing you always do is check it out for yourself.  So I went onto the server, played around for a while and sent myself an e-mail.  Ahh, simple success.  Everything was working correctly and a scan through the server event logs showed that everything had always been working perfectly.

Nuts, that’s not good.  My customers aren’t technological savages, they don’t report a tech problem like not receiving e-mails unless  they do some checking for themselves.  Actually oftentimes problems are quite well established before I hear about them.  This means that except for very, very rare instances the problem is absolutely true.  So while all this was heading through my mind and the check of the logs, a couple of minutes had passed and it was time to check my e-mail account for my delicious test e-mail.

It wasn’t there.  Everything had worked properly and yet the e-mail hadn’t arrived at its destination.  It was a single hop and I knew my e-mail was working because this issue had only been reported moments prior by e-mail.  After confirming a few more things and waiting on my hands for even more time I eventually gave up and decided that e-mail wasn’t working after all even though it was working as evidenced by this customer sending e-mails to me.

So my in depth research has shown some very interesting results.  Essentially the server that was sending e-mails is not the typical e-mail server.  Now due to the proliferation of Spam e-mail servers have started getting “smarter” and taking the spam verification process much more seriously.  There are many ways of checking for spam and most of those options are potentially error prone and thus we all have spam folders that need to be gone through on occasion.

There is one newish way of checking for spam though.  And this way is “fool proof”.  Basically each server that is suppose to send mail is actually registered at a very low level on the internet.  This information can be searched for and the sending domain (like @hotmail.com) can be pulled out and tested.  If this information doesn’t match or doesn’t exist, then the message can and often is marked as spam.  The e-mail provider for my client took this an extra step (one that I suspect will become far more common) they just deleted the messages without delivering them at all.

So, I fixed this issue by making changes to how the server was sending e-mails.  What does this mean to you?

Basically this means that you need your IT people to make sure that e-mail is only sent through the official channels.  Normally if you are using Exchange that is taken care of for you, but if you are using e-mail programs for newsletters or specialized programs that directly send e-mail you could be in a tight bind.  It is getting to be close to impossible to send e-mails without using the properly setup servers.  If your e-mails are being caught often as spam, you need to have IT take a look and ensure that your e-mail servers are properly registered otherwise you may find your e-mails go missing more often than not.

The type of tax I was going to talk about this time is GST.  Worldwide this type of tax is commonly known as VAT or Value Added Tax.  Basically it is a type of tax that companies are able to recover.  A VAT type tax is often known as a “good” tax if any type of tax is known to be good.  It is better for sure than some provincial taxes that are unrecoverable by business.

In Canada a business has the option of not charging or recovering GST if they earn less than $30,000 a year.  Most accountants or bookkeepers would advise any business to register for GST.  I see both sides of the equation because obviously not charging GST is a favorable situation for most small businesses since it can make your products seem more attractive.

On the other hand not being able to claim tax credits for business purchases does hit your bottom line.  I would suggest small business owners who do not have to collect GST to take a look and decide on your own if your input costs related to GST are less than the “loss” you would take by charging GST.

Businesses who supply goods to other companies, take a look though at registering for GST.  Any company of any size will have GST registration so the GST cost to them is temporary since the Government will credit back all those costs.

Monitoring the costs of taxes paid out on purchases verses the impact that charging your customers taxes is always important to businesses.  Fortunately due to Canada’s implementation of a VAT tax instead of a non-refundable tax like many other countries and states/provinces.

My next tax article will cover the new changes going on in Canada’s largest province with a change from GST + non-recoverable provincial taxes to the new HST (Harmonized Sales Tax).

Companies like Home Depot have our credit card numbers.  Brokerages have pretty much every piece of information about us and our money.  Honestly its getting scarier all the time because of the amount of data these companies store.

A more recent tale of woe belongs to D.A. Davidson.  They managed to loose 20,000 customer records in an attack on their website on December 25, 2007.  The biggest problem is that not only did they have this data stolen they didn’t know about it till the thief contacted them 2 weeks later asking for a ransom for the data.

According to security experts the security was “deficient in that the database was not encrypted and the firm never activated a password, thereby leaving the default blank password in place.”  Basically they left the door wide open for anyone with a little (very little actually) knowledge and malicious intent.

In April 2006 Davidson was actually told by security auditors to beef up their security by implementing intrusion detection systems.  20 months later and they still had no system in place.

Here is where the cost comes in.  Normally you would expect that thousands of people are now at risk of having their identities stolen and maybe even having vast sums of money taken.  The businesses often seem to get away unaffected.  Well this is where the government is cracking down, the firm had to pay $375,000 to settle with the US government for the breach of trust.  Now in addition to that I would expect that anyone affected would also have the ability to sue this company as well.

So the next time you are collecting any customer information, give some thought to keeping that information secure.  It could cost you more than a quarter million dollars to ask forgiveness from the government for that failure.

So to help you out with that I will occasionally post deals that I find that may be of interest to business owners.  Most of these deals will likely only be applicable to Canadian businesses but that will depend.

So this time the deals that I have found that could be of interest to the small business are from Dell.  Dell has an event running from Monday April 12, 2010 to April 23 (excluding weekends).  Each day they post about 6 deals that might be of interest to small businesses.  Actually the products are only found on the Dell.ca Small Business site so I guess that’s a clue.

New deals show up at about 6AM eastern time so you’ll need to keep and eye.  Check them out at the Days of Deals site on the Dell.ca Small Business area.  Previous days deals have included desktop and laptop computers with discounts of $100 to many hundred dollars and some very interesting prices on peripherals for computers.

Now, a study has concluded what lots of us have long suspected: Many of these irritating security measures are a waste of time. The study, by a top researcher at Microsoft, found that instructions intended to spare us from costly computer attacks often exact a much steeper price in the form of user effort and time expended.

The reality is that stolen passwords and the damage done with those accounts are estimated to cost IT many billions of dollars a year.  This staggeringly huge number makes a lot of businesses start to create policies to prevent those stolen passwords as much as possible.  The problem with password change policies is that research shows people who steal your passwords are not going to wait around for you to be able to change it before they use it.  Generally speaking the damage is done shortly after your password has been stolen.  Changing your password even once a day is unlikely to stop the damage caused by a stolen password.

Quite honestly a regular password change policy can be counter productive as many of us can attest to.  If the passwords need to be changed we still need to be able to remember those passwords.  This causes people to start picking easy to remember passwords, using a system that might be easily guessable or worst case, writing the password down on a sticky note and posting it on the computer.

For businesses the point that needs to be grasped here is the appearance of security doesn’t actually mean you are secure.  Often the opposite is true.

A more sobering fact that might make those who are still unconvinced more aware of the financial cost of wasting peoples time without security benefits.  A paper was presented at a security workshop at Oxford University last fall.  This paper used some crude economic analysis and a little bit of basic math to estimate the worth of a users time.  Based upon the approximately 200 million users who go online in the US each day.  If they each earned twice the minimum wage, a minute of time from each of them per day costs $16 billion dollars a year.

That is certainly a sobering number.  The biggest problem that exists with security time sinks is that the damage is not easily expressed in dollars.  Its actually expressed in getting less done, having people who are less happy in their jobs.  Or again, really decreasing the overall security because someone decided to cut a corner.

IT is really suppose to make peoples lives easier.  Far too often we react and make peoples live far more difficult in the name of security.  Business owners, keep this in mind, always try to find out the true cost of security before you setup a policy that doesn’t actually make us any more secure.

Honestly this is an issue that until recently I didn’t have any good answers for.  Actually I’m still working on perfecting my answer because there are a few small items that aren’t quite up to my expectations.

Most people access e-mail through an account created by their ISP or possibly a company specific e-mail account.  The general problem is we all need far more e-mails than there is space on the server to store them.  Thus the e-mails are downloaded to our computers and magically get deleted from the server.  For the most part this works quite nicely, except if you use multiple computers or would like to access your e-mail (and history) while on a business trip.

Most small businesses have to deal with this problem all the time and generally solve it the easiest way possible.  Ignore the issue and hope it doesn’t come back to bite you.  While this is certainly the simplest solution it doesn’t really solve the problem.

What you need is a simple way to access all your e-mails online.  So to do that you need one of 2 things.  An online e-mail service like Google.  Google actually offers a domain e-mail solution that combines your web domain and their e-mail services.  Or you need your own e-mail servers.

Personally I actually use a combination of the 2 solutions.  For personal consumption I use Google since it is just so simple.  And I would recommend any small business to take a serious look at Google for domain e-mails.  It pretty much just works and the cost/investment is pretty much zero.  For business I actually have my own Microsoft Exchange server.  This is an ideal situation since Exchange has high powered web mail capabilities as well as excellent integration into Microsoft Outlook.  My new solution is actually to use Exchange and enable the Exchange IMAP functions.  With IMAP almost any mail client can connect to my e-mail accounts so I now have my mail on every one of my many computers.  Its even fully accessible on devices like smart phones.

The really nice thing about having your e-mails accessible from anywhere is that you are no longer restricted to your laptop or desktop.  And if the computer crashes you don’t spend a pile of time crying about lost e-mails.

Centralizing your e-mail may cause a little bit of short term pain.  The benefits so outweigh the problems you may have in the short term though.  No loosing e-mails in a computer transfer.  No longer end up out of touch on the road.  No panicked requirements for a Blackberry.  Most of all it also means that the number of e-mails you store is now only limited by the number of hard drives your willing to stuff into a server, or the amount of space a generous e-mail provider like Google will give you.

For setting up a self hosted solution like MS Exchange you will likely need an IT expert.  I have considered writing up a bit of a tutorial for doing such but I am concerned it may be a little to technical for this blog, opinions would be welcomed.

In the past the tax department has always had to manually look for fraud or inaccurate statements.  With the rise of cheap computer equipment this has changed.  You can expect that your tax return will be analysed by not just people but very advanced computer programs designed to find fraud.  One such method is checking your government returns like income statements, taxes collected and remitted, bank records, etc against your reported earnings and expenses.

The tax department also has millions of people filing their taxes, so you can even expect things like statistical analysis of standard returns.  Things like looking at the average tax return from the last few years and comparing how far from average yours is.  Too far and you’ll be flagged.

There is a new, or actually old (discovered as far back as 1881), tool that has recently been added to the tax departments war chest for finding cheaters: Benford’s Law.  Basically Benford’s Law states that in naturally occurring numbers, the number one will appear as the first digit more often than other numbers.  The number 1 occurs as the leading digit 30.1% of the time.  The number 2 occurs significantly less at about 17.6%.  This continues all the way down to the number 9 which actually only appears as the leading digit about 4.6% of the time.  (source: wikipedia)

This counter intuitive approach to numbers is completely opposite of how most people would invent numbers.  Most people would create numbers by making sure they look approximately random, which would typically mean that each number would appear about 11.1% (1/9) of the time as the leading digit.  While this does make for a random number it would seem that random is actually not how the real world works.

What does this really mean for you?  Essentially it means that cheaters are going to get caught.  It also means that if you are still really wanting to commit fraud you will have to become even smarter.  The tax department has years to keep re-examining your tax returns so you not only have to beat the system now, you have to keep beating the system for years to come.

Fortunately, those who follow the laws don’t have to use statistics to make sure they don’t get taken to court because of some “math”.  Facts and tax law are still the only way the government will reassess you or take you to court.  The new advanced math methods are simply used to flag possible issues for further analysis.  A false positive may only result in the tax department manually checking your returns or possibly contacting you for some clarifications.

Benford’s Law can also be useful in other situations for a business.  Keep a watch as I cover those opportunities coming up.

I am my own bookkeeper, and honestly I fall into that second category.  Bookkeeping is the worst thing and I put it off till the year end (making it even worse).  The effect of which means I often end up missing out on all the best deductions as well as filing everything with the government (like taxes) at the last possible moment.  This is the worst thing anyone can possibly do.

There really isn’t any magic pill or spell that will fix your broken bookkeeping come the end of the year.  Getting caught up is your only option and the headache that will ensue is your reminder to fix the system so you don’t do it again next year.  Getting caught up for me means spending a few very stressful days finding every single receipt that I didn’t throw away and entering them into my accounting system.  Photocopying the ones that might fade.  Hoping I can read the ones that have already faded.  Basically its the worst thing.  Anything, including the dishes or beating ones head against a brick wall for fun or profit is more fun.

The race for receipts is unavoidable at this point, you’ve fallen behind on bookkeeping and without those receipts you cannot prove your expenses and your pretty much out of luck.  So, just do it.  Once finished you need to fix the system that so this isn’t repeated year after year.

So that is what I have done.  I have contracted out a bookkeeper.  Looking for one proved to be fairly simple (Google, my best friend) and honestly they are far cheaper than I would have imagined.  If you have fairly simple expenses (and most small businesses do, or should) and you update your bookkeeper whenever you make purchases or bill people you will find that a bookkeeper will only cost you a few hundred dollars a month.  This is honestly the best investment you can make in your business.

For only a few thousand dollars a year you completely eliminate the receipt dance.  You also eliminate the headache and days of emergency bookkeeping.  For that small investment, my life is 100 times better.  Quite honestly if you have a great bookkeeper you need to appreciate them, they are making your life so much better.  And if you or your bookkeeper keeps messing up and making your life more complex than it needs to be, get that fixed!  A good bookkeeper should only need a few hours a month to manage simple books and they should be able to accomplish that with almost no input or direction from you.

Also, FYI, listen to your good bookkeeper.  They may provide advice for how to organize the information you submit to them, if so, follow it.  This advice isn’t meant to make your life more complex it is meant to save you money and keep your business above board and audit resistant.

I’ll be providing some updates over time as my bookkeeping experiment continues…

I’m quite sorry I left everyone hanging for so long.  Its been an interesting few months where my company has required quite a bit of my time and I was just left exhaused whenever a free moment was available.  Things are now better managed and I’ll be going though some of the mistakes I made and provide some helpful hints so the rest of you can avoid these pitfalls.

Next post will be all content, I promise.

How are we as small business owners taking advantage of this?  Are we using technology to our advantage or are we regularly fighting with it?

If you are fighting with technology you really don’t have very many options, either dump it altogether and loose out on the options and opportunities offered or get some help.  Really I don’t quite understand why people choose to do absolutely everything themselves in small business.  I understand that money is often tight but if you could free up lets say 2 hours a day could you possibly find a way to earn more money with that spare time?

Chances are you are wasting more than 2 hours a day with technology that is either poorly suited to you or just plain crappy.  Free software and old cheap computer hardware can be one way of saving money but more likely you are being penny wise and pound foolish.  Buying or building the proper technology for your business will not only make you more productive but it will make your life more enjoyable.

Rather than fighting with whatever piece of techno-crap you have cobbled together you may want to consider actually finding a savvy computer person to perform a little consulting for you.  I’m not talking about spending weeks of time and recommending a million dollar investment, I mean just take a look at what you have setup and see if they have some recommendations that could make life better.

A complete overhaul of your operations from a technology standpoint may be exactly what you need but obviously money isn’t unlimited so start small and build.  When you get technology though make sure you are purchasing for a purpose, saving money just because you can will often come back to bite you with technology.  Quality hardware and software does cost money and having a techno geek around to advise what is actually quality and what is overpriced will be worth it.

Remember technology can either waste your time or free your life.  If you want to achieve freedom you will have to spend effort on getting the right stuff for your business, or find a technology consultant to help.