Mountain Views News     Logo: MVNews     Saturday, September 15, 2012

MVNews this week:  Page 14



 Mountain Views News Saturday, September 15, 2012 


The latest on Business News, Trends and Techniques

WHAT IF....? 

By La Quetta M. Shamblee, MBA

Thinking of a Cyber 9/11

 On the 11th anniversary of the 9/11 attacks, both lawmakers and Intelligence officials are 
musing the possibility that the next attack of that magnitude or nature could be triggered by 
the click of a mouse. 

 We now live in a highly interconnected world where every facet of our modern existence 
is controlled by a greater or lesser extent by computers. The North American power grid 
consists of more than 5,000 companies that own and operate more than 160,000 miles of 
high-voltage transmission lines and more than 1 million miles of local distribution lines. 
This complex system is controlled and regulated by massive amounts of interconnected 
computing power. 

 In 2011, our national Air Traffic Control systems insured the safe travel of the 4.2 million 
passengers who flew on one of the 30,000 flights that traversed the country on any day of that 
year. This complex system is controlled and regulated by massive amounts of interconnected 
computing power. 

 Hospitals in the US registered with the American Hospital Association admitted more 
than 39 million patients in calendar year 2011. These patients depended upon and received 
services that were tracked and coordinated with massive amounts of interconnected 
computing power. 

 These few examples show just how much our most basic needs as a modern society are 
dependent upon computer systems. In our national efforts to secure critical infrastructure, 
both lawmakers and Intelligence analysts are working (or should be working) feverishly. 

 And in this day and age we should not only be looking to defend against our traditional 
definition of “terrorists”, we must be on guard against homegrown threats, just-plain-things-
going-awry, and state-sponsored groups. This last group has already demonstrated that it 
has the know-how and resources to bring down parts of critical infrastructure systems (see 
Brazil power grid hacked in 2005, 2007 and more recent news on the hacking of the Iranian 
nuclear program). 

 We live in the age of Stuxnet, Duqu and Flame. These fellows are potent examples of state-
sponsored cyber-warfare that have done serious damage to their intended targets and even 
more surprising, went undetected by the entire anti-virus \ anti-malware industry for more 
than 2 years despite having atomic patterns that should have set off alarms a long time ago. 

 We’ve been incredibly lucky so far in that we haven’t been hit with anything like these 
attacks on a scale to bring down any part of our critical infrastructure but we would be silly 
to believe that luck or circumstance will sustain us much further into the future. 


It is hard to imagine that a business could have 
a steady flow of incoming cash from sales, yet 
finding itself in a position of not making a profit. 
This scenario is more common that one might 
think. When it happens, it’s the result of not 
having a financial recordkeeping system in place 
to track a few key business indicators. If you 
don’t count it, you can’t track it. 

In addition to having a basic accounting system 
in place, it is important for small business owners 
to apply business indicators that provide timely 
information about the company’s financial 
operations. Understanding fixed costs, break-
even analysis, per unit costs and average sale per 
customer is information that all business owners 
should know.

Fixed costs are recurring expenses that need to 
be paid on an ongoing basis regardless of the 
level of goods or services produced or sold by 
the business. Expenses like rent, insurance and 
salaries for staff scheduled to work the same 
schedule on a regular basis are a few examples 
of fixed costs. In contrast, variable costs include 
items that will fluctuate based on the level of 
need, production or sales.

Break-even analysis is the point at which 
expenses and revenue are equal, it is referred 
to as the break-even point. Fixed and variable 
expenses are included. Every sale beyond that 
point represents profit. A restaurant owner should 
be able to approximate the number of customers 
needed on a daily or weekly basis to cover all 
expenses. The owner of a baseball batting cage 
should know the number of customers that will 
be needed to reach the threshold for profitability. 

Per unit costs indicate the out-of-pocket 
expenses it takes to provide each category of 
goods and services to your customers. This is 
the only way to know if you’re generating a profit 
from specific items, and the profit margin. The 
information can be used to make a clear case 
about which goods or services are generating 
profits to strengthen your business, or those 
that may need to be eliminated because there is 
a net loss per each sale. (Total cost to purchase, 
develop and/or produce a good or service that 
will be offered to a customer)

Average sale per customer provides information 
about the typical amount per sale from each 
customer. This indicator is useful as a starting 
point to determine ways to increase the average 
amount that each customer spends with your 
business. It also tells you the current dollar 
amount that the majority of your customers are 
willing to spend with you. (Total sales within a 
certain time period, divided by the total number 
of customers within the same period)

These four indicators are among the most basic 
tools used to measure and track the status of 
activities that have a direct impact on the financial 
health of a business. An additional, formal set of 
financial ratios in four major areas, are calculated 
from a company’s financial statements. Liquidity 
ratios, asset turnover ratios, financial leverage 
ratios and profitability ratios are standard tools 
used across the corporate sector. Ratios are used 
to diagnose a company’s financial health in a 
similar way that the medical professions uses a 
standard set of tests for blood pressure, heart rate 
and blood tests to gauge the overall health of a 
patient. The four business indicators reviewed 
above are a great starting point. 

KNOW…………….. By Patricia Richardson, M.B.A

I have just finished 
downloading QuickBooks 
Accountant version 2013. 
It looks great, coloring is 
different but the Homepage 
and Icons are similar. No 
big surprises. I am looking forward to trying out 
all the new add-on apps. Too bad you have to pay 
extra for them.

 Yesterday while reading (listening) to some of 
the QuickBooks conversations on LinkedIn, I 
was shocked at the lack of product knowledge 
that some of these QuickBooks professionals 
expressed. Someone asked “What’s the difference 
between a sales receipt and a sales invoice”? 
Clearly they did not read Intuit’s Top Ten 
QuickBooks Tips, Tricks and Techniques because 

Tip #1: Entry of daily summary sales report 
from cash register or other daily sales log into 
QuickBooks answers that question. Besides it is a 
fundamental QuickBooks operation.

I have had several people tell me that because 
their business is a cash business they cannot use 
QuickBooks. It takes a little arm twisting on my 
part to get some business owners to understand 
that summarizing their cash sales (think cash 
register tape) each day and using a sales receipt 
to record the sales will work perfect for their 

So if you are still wondering about the difference 
between a sales receipt and a sales, think about 
the difference between a cash sale and a sale on 
account. Remember from your old accounting 
class that each transaction does at least two things 
or affects at least two accounts. Well, QuickBooks 
has set up the sales receipt to record the sale and 
sales tax (if applicable) and also posts the cash 
received to either increase a bank account or 
undeposited funds (you set the preference). Also, 
QuickBooks has setup the invoice to record the 
sale, sales tax if collected and increase accounts 


Customize the name on a sales receipt to Daily 
Sales Summary

Create a customer name Daily Sales or Cash 

Create the items you need to reflect the normal 
daily sales: example inventory part/non-
inventory part

Create the items you need to reflect the payments 
made: example AMEX, check, cash, MC

Create the items you need for overages and 

*I recommend mapping the payments to the 
bank account in order to match them with the 
way they are actually deposited so that the bank 
statement can be reconciled. 

Intuit’s focus on the cloud was discussed at the 
2012 Scaling New Heights conference. Jim Ward, 
Senior Vice President and General Manager 
of Intuit’s Accounting Professionals Division 
stated, “Today we are delivering innovative 
cloud solutions across our entire product lineup 
with products like Intuit Tax Online, the first 
cloud preparation service; QuickBooks Online, 
and Online Payroll. We have more than 50 
apps that work on mobile devices and tablets, 
with over 7 million active customers using our 
mobile products. Connected services, which 
Intuit defines as both SaaS (Software-as-a-
Service) products and online and mobile apps 
that connect to the desktop, is a key part of our 
business strategy and the fastest growing part of 
the Intuit business, growing 16 percent last year 
and generating 62% of the company’s revenue.”

It will be interesting to test all these new apps.

Patricia Richardson the owner of Monrovia 
Computerized Business Service and is a local 
accountant, educator and trainer working to help 
business owners realize their business mission 
and vision by empowering them with tools 
and training in areas that may not be their core 
competency. For additional information, patti@ or



I’ve had some interesting conversations with business owners who have been burned by running 
coupon campaigns with some of the big local deal companies (I won’t name those companies, you can 
read between the lines). I recently talked to a local Arcadia business that had a horrible experience 
with one of these companies that set up a local deal for them. First, they didn’t get the list of the people 
who signed up for the deal. Second, the deal attracted the wrong kind of customer; one person had a 
melt down at the cash register when she was told she had to pay for the tax, she sat on the floor and 
pouted! Third, the deal company took more than half of the profits. This business actually lost money 
on this campaign. 

Business owners who have used the large coupon companies are saying that these deal campaigns 
only attract a one-time-charlie deal seeker. Smart business people know that not all business is good 
business and they want to woo and retain good customers. Shouldn’t loyal fans get the benefits of 
deals anyway? So what’s the answer? 

I recently had to come up with a solution for a client who wanted to run a deal for her personal 
training business. She wanted to offer a $50 discount for the first 10 people who signed up for her 
$150 session.

We decided to explored Constant Contact’s new “SaveLocal” tool. I was really impressed and it turned 
out to be the best solution for her offer. It gives full control to the business owner. The tool instantly 
builds a quick landing page and email campaign. Constant Contact only gets $1, $2 or $3 per each 
deal sold, not the typical 50% cut! 

It also has an optional feature that rewards current customers for sharing the deal with their friends 
and networks. The tool is built on the philosophy that word of mouth is the best source for new 
customers. The tool allows you to incentivize word of mouth and actually track it! You don’t have 
to set up any fancy merchant account for it, you just put in your email associated with your PayPal 
account. You get paid instantly through PayPal with each coupon you sell, so there’s no waiting. I 
like the Save Local solution because Constant Contact has the business owner in mind. You are in 
complete control of the offer, you set the price, how many you want to sell and when you want to 
promote your campaign. 

If I had 10 thumbs, I’d give the “SaveLocal” tool 10 thumbs up! I think it’s a great solution for small 
and large businesses.

About MJ: MJ and her brother David own HUTdogs, a creative services business that specializes in 
Social Media Education for business owners. Join their conversation on Facebook and get good tips 
and tricks about social media, 

Sign up for their upcoming classes and presentations at:

What else is in the news? The exploding growth of the Cloud! The term “the cloud” is a 
metaphor for the Internet. “The name “the cloud” comes from the use of a cloud shaped 
symbol as an abstraction for the complex infrastructure it contains in system diagrams.”