More than Money

Self-motivation is worth more than money
If you have the MONEY to hire the best advisors, but lack the motivation to actually use their advice, you will quickly lose the money. However, the person with the self-motivation to take intelligent action can have as much money as he or she is committed to earning. This is why people can go from rags to riches and why many rich people, end up not only broke – but broken.

In my business, I work hard to avoid people, who want to hire me as their marketing coach, just so we can have lots of interesting conversations. This is because I know that unless someone is motivated enough to get off their butt and work with the ideas and answers I provide to them, they won’t achieve anything. However, a self-motivated person working to a great plan, is simply unstoppable!

Faith is worth more than money
No matter how rich a person is financially, if they lack faith in; them self, their spouse, their friends, their company or product etc – they won’t feel very wealthy. Personally, I find that during the crunch times in life, and we ALL have those times, it’s also great to have faith in something that’s bigger than we are. In my case, that’s faith in God.

It’s impossible to move forward, unless we have faith in others and ourselves; from faith that the brakes on your car will work, to faith that if you work hard enough doing the right things, your business plans will work.

Knowledge is worth more than money
If someone dumps a million or two into Bob’s bank account, he better quickly learn how to be a millionaire! Otherwise, Bob won’t be a millionaire very long.

The reason lottery companies provide financial experts to work with the lottery winners, who win the major prizes, is that they were worried about all the negative stories, of multi-million lottery winners, who went broke and often ended up with less than they started with. That’s because money without knowledge, tends to disappear very quickly. A fool and his money, and all that! Of course, many lottery winners still went broke after getting great financial advice, because they lacked the self-motivation to use what they were told.

My mentor, the late Jim Rohn, used to say that the real value of building a million dollar business is NOT the million dollars. It’s the learning and knowledge we acquire earning that fortune. Take a million away from a millionaire, who made that money themselves, and they can make another million. This has been proven again and again to be true.

10 tips to make money with Google Adsense

When thinking about website monetising, Google Adsense is probably the first thing that came to the mind of many people. Created in 2004, Adsense is the easiest way to make money online. Making real money with Google Adsense is not as easy as it seems, but if Adsense wasn’t an efficient way to make money online, people would stop using it.

In this article, I’m going to show you 10 efficient tips to really make money with Adsense.

Understand on which sites Adsense works
Is it possible to really make money with Adsense? The answer is definitely yes, but not on all kind of sites. If you have difficulty and always had terrible results with Adsense, it's because tech-savy people will not click on Adsense ads.

Know which niche are good and which ones are to avoid.

Avoid “SmartPricing” like the plague
Smartpricing is when Google automatically gives the advertiser a discount based on the perceived value of your web site. Certain types of sites supposedly generate more sales so get a higher cost per click while others are typically more lookers and get paid less per click.

If Google placed your blog in the second category, no luck for you. In fact, for the same click on the same ad, a website can earn $1 while another will get on 10 cents!

To avoid getting “Smartpriced” by Google, you have to try to keep your CTR high. Low CTR sites (under 1 or 2%) generally ends up by being smartpriced.

Place Adsense ads on old posts only
To avoid smartpricing, display Adsense ads on old posts only because the vast majority of your regular visitors don’t click on ads. By showing Adsense on old posts only, you’ll definitely keep your CTR high.

The following functions have to be pasted in the functions.php file of your WordPress theme.



Once you successfully inserted the code into your function.php file, you are now ready to call the functions in your single.php template as shown below:



To appear on Adsense ads, advertisers have to bid on a specific keyword. Some keywords, such as “mortgage” have a way higher CPC than others.

A great way to maximise your Adsense income is to identify those high paying keywords and use them in your blog. Several lists of high paying keywords are available on the Internet, some are free and some aren’t.

A good list to start with is this one, which is completely free.

Work with keywords
Although you can’t directly control which Adsense ads appears on your site, you can work with keywords in the hope that Google will display related contextual ads.



For example, if you’re writing a post about Javascript, the keyword “javascript” has strong chances of being used in Adsense ads. If you want Adsense to display ads based on high paying keywords, you have to put these keywords on your document. Don’t abuse though; you may be penalized by Google.

To check your keyword density, here is a great tool : http://www.ranks.nl/tools/spider.html

Use section targeting
As I said before, in order to maximise your revenue you have to work on keywords, but what if Adsense is displaying ads based on a keyword you don’t want to be used? Using section targeting, you can emphasis some text as well as asking Adsense to ignore some other.

The following example shows how to use section targeting in your posts:

Another way to avoid being smartpriced is definitely to display Adsense ads only to visitors who came from search engines.

The following WordPress hack will do that job perfectly. To apply it to your blog, insert the code below in your theme functions.php file. Note that the $SE array is where you specify search engines. You can easily ad new search engines by adding new elements to the array.

function scratch99_fromasearchengine(){
$ref = $_SERVER['HTTP_REFERER'];
$SE = array('/search?', 'images.google.', 'web.info.com', 'search.', 'del.icio.us/search', 'soso.com', '/search/', '.yahoo.');
foreach ($SE as $source) {
if (strpos($ref,$source)!==false) return true;
}
return false;
}

Once done, open the file where you want to display the ads and paste the following code:

if (function_exists('scratch99_fromasearchengine')) {
if (scratch99_fromasearchengine()) {
INSERT YOUR CODE HERE
}
}

Save the file, and you’re done. Thanks to Stephen Cronin for the hack!

Go Large!
Adsense ads can be displayed in various formats, but they don’t provide the same results. Although it depends of many factors such as your blog niche and layout, the large rectangle (336×280) has proven to be the best paying Adsense format. It is also one of the few Adsense block which can display video ads.

Use a personalised Google search engine on your blog
Many people don’t like the way WordPress search works, and I must admit that this is not the best feature of my favorite blogging engine.

The tools works very well, and you can start monetising it using Adsense. I found out that the search engine is very profitable.

Don’t break Adsense terms of service
At last but not least, one of the best bits of advice I can give to anyone who’d like to make money online using Google Adsense is to be careful with the terms of service. For example, if you click on your own ads, or display incentive messages on your site, Google will quickly finds out and they will consenquently ban your site from Adsense.

You have to play by their rules, so don’t thing you are smarter than them. Respect the terms of services, optimise your ads using the tips I just gave you, and write great content so people will visit your site and click on your ads.

The Rising Cost of Money: The Pound (GBP)

A photo taken at the charity auction held by Clydesdale Bank in Glasgow, of a historic 1836 Scottish £1 note which has sold for what is thought to be a world record £9,000

Cyber criminals can empty business accounts in minutes

Modern Methods to move and transfer Money, ensure that it moves fast and it can be equally fast going from your account with Automated Clearing House (ACH) fraud.

These criminals are not stupid. They knew what they were doing when they hit the US Western Beaver County School District and they knew when to strike.

They waited until school administrators were away on holiday, and then during a four-day period between Dec. 29 and Jan. 2, siphoned US$704,610.35 out of two of the school district's bank accounts. Western Beaver's financial institution, ESB Bank, managed to reverse some of the transfers, but the Pennsylvania school district was out more than $441,000.

On July 9, Western Beaver sued ESB to try and recover the money, but security experts say that it's just one of many organisations that have been hit in recent months by a disturbing new type of financial fraud that can often leave the victim holding the empty bag.

Fraudsters are taking advantage of the widely used but obscure Automated Clearing House (ACH) Network in order to pull off their attacks. This financial network is used by financial institutions to handle direct deposits, checks, bill payments and cash transfers between businesses and individuals.
In April, ACH fraudsters moved $1.2 million out of a Sugar Land, Texas, importer called Unique Industrial Products, according to a report in the Houston Chronicle. They did this by hacking into the company's computers and then authorising 39 transfers to move the money out of Unique Industrial's account. Although the bulk of the money was recovered, scammers made $150,000 from the attack -- not bad for 30 minutes of work.

Avoiding Identity Theft: What to be aware of

Look out! Look out! There's a thief about! You would be amazed how little information a criminal needs to steal your identity.

Social Engineering is the real threat

Even a piece of direct mail that you've carelessly thrown away, can be enough for a fraudster to pose as you, borrow money or acquire sweets and goodies and then vanish. What do you get? Debts in your name and your credit status in tatters.

The information they use varies but the personal information that an ID thief is typically interested in is your full name, date of birth, current addres, account numbers and, if possible, passwords and PINs.

It sounds a lot but a little work can deliver a surprisingly large amount of data. The idea is to do a bit of cherry picking, and the internet and social networks are a big help.

Here are the ID fraudster's 10 most wanted items.

1. A bank statement
If they're really lucky, a statement might indicate your overdraft limit as well as your full name, address and account number. Shred, burn or rip em up, before binning them

2. A credit card statement
This won't contain your PIN, so they can't use the card account in a British retailer, but it could be enough information to enable the fraudster to purchase from foreign websites. Shred, burn, rip..

3. Access to your social networking pages
It may seem innocent enough, but many people innocently reveal enough information on Facebook, My Space or other social networking sites for a fraudster to guess their PIN and passwords. Don't make it too easy. Change them regularly.

4. Direct mail
Fraudsters are always on the lookout for direct mail containing an offer of a credit card or loan, with your details filled in that they can intercept. Once a crook has one fake account in your name, it's easier to open others. Shred, burn, rip...

5. Your driving licence or passport
These documents provide vital photographic ID that can be amended by an expert and used to prove that he or she is actually you. Secure them securely....they are worth 50,000 GBPs

6. Replies to phishing e-mail
Phishing e-mails are messages that appear to be sent from your bank or other trusted authority and are designed to capture your personal or financial information. Always remember that banks never ask for your PIN or internet banking details. Don't respond to scam stuff...

7. Your PINs and passwords
These are essential if a criminal wants access to any of your accounts or to use your payment cards. Guard them securely and change them regularly

8. A catalogue
Mail-order catalogues may appear innocuous enough, but if they're stamped with your name, address and account number, a thief could claim you've moved home and hijack your spending limit. Shred, burn, rip up anything with your name and address on it before binning

9. Your CV
Most CVs had a lot of personal information, such as your name, address, date of birth, employment history and marital status. Your CV contains so much information that could be used to impersonate you that some online job search services are advising people to be careful before uploading them to to their sites Be selective and question people who want your details.

I agree that it is difficult if you are looking for work and broadcasting lots of CVs in an uncontrolled manner. Keep a spreadsheet of who you have contacted (Company, Contact person, phone number) and when, also which CV version they have but 'be aware' that not all e-mails asking for CVs or CV updates are genuine.

Question them! and do some research on THEIR contact details and website credentials. We all know how easy it is to create a believable or viable website!

If in doubt, don't do it! or severely restrict the amount of personal information on the CV provided. Think of it like this; someone (an attractive stranger) has just stopped you in the street and asked for your contact details; name, address, phone number, e-mail address, etc. In return, you get a moment's 'hope'; hope of a job, hope of money, hope of a future. It is a very attractive offer!

Would you do it? Consider under what circumstances you would do it and why? Consider also how you could replicate those 'conditions' online, when responding to requests for personal details?

10. Online banking information
A prime target for credit-hungry fraudsters, who often set up fake websites to con genuine account holders into parting with their access data. Never click a link in an e-mail directing you to a supposed banking site - it could be a trap. Watch out for scam e-mails and don't click on anything from anyone you don't know

How thieves get your details

The snail mail post and mailing lists, is the most likely way that ID fraudsters would get hold of some of your personal details. The crooks' top choice of method is to forward your mail to a collection address. This was the cause of 36% of identity frauds during 2007. Check with the Post Office if your mail suddenly stops arriving

In second place, with 30% of cases, comes present address fraud, in which someone living at the same address - often flats with communal postal delivery areas - steals your mail. Previous address frauds, when the criminal uses your name and a previous address to take over your ID, account for 24 per cent of cases. Make sure your Postie knows you (I am Spartacus) and make sure your post box is secure - change the lock if you are suspicious or paranoid

Other popular cons to steal your personal details include:

• Stealing your stuff /belongings
  
• Tenancy fraud, where the tenant uses the landlord's details to borrow money
• Jackal fraud, when the criminal uses personal details of a dead person
• Card not present fraud, which occurs when someone has your credit or debit card details, but not the card, uses it on the internet or over the phone

Social Networking is the next best tactic for stealing people's identity and it is closely related to this article. The thief simply uses his /her personality to trick the target into divulging information about people, places or companies. Click Here for More Details

Capitalsim v Socialism

In Capitalism, man exploits man. In Socialism, it's exactly the opposite!

Dirty Laundry - leaking Security

Oh what a tangled web....
Your security providers cannot, and will not, tell you the whole truth about their security business because security is a state of mind. An illusion based on perception and relativity.

We accept the need for security service providers to specialise in the protection of our functioning environments and see their task as preventing or reducing unacceptable risk. You would be very naive to think they do this for altruistic reasons. The goal of the security market is to make money and they are doing very well, thank you.

As with all profit focused companies; 1) Security companies specialise in niche markets and have varying degrees of success in these markets 2) There are universal weaknesses in the structure that are not being addressed because;

• the technology or algorithms are not sophisticated enough, yet
  
• the market won't pay the price in restricted access, additional filters /controls that slow throughput and diminish transfer speeds
  
• they are chasing a shape-changing, highly motivated and relentless attacker, some of which are government sponsored
• Others
  

Here are some secrets of the security industry and practical ways to command honesty from your trusted security providers.

• Antivirus certification omissions - One of the biggest secrets in the industry is that, while antivirus tools detect replicating malicious code like worms, they do not identify malcode e.g. nonreplicating Trojans. Although Trojans have been around since the beginning of malicious code, there is no accountability in antivirus certification tests. Today Trojans and other forms on nonreplicating malcode constitute 80% or more of the threats businesses are likely to face. Antivirus accountability metrics are simply no longer reflective of the true state of threat.
• There is no perimeter - If you want to fight on the perimeter then you need to define where and what the perimeter is. Is the endpoint the perimeter i.e. is the user the perimeter? Is it not more likely that the business process is the perimeter, and the information itself forms part of the perimeter too. It is unlikely that you design your security controls with no base assumption on establishing a perimeter. The mistaken assumption we tend to make is that we have established controls at the perimeter and are therefore secure. Unfortunately for many types of threats, we could be very wrong.
• Risk management applies - Risk management threatens vendors. Risk management really helps an organization understand its business and its highest level of risk. However, your priorities don't always map to what the vendors are selling. Vendors focus on niche markets and individual issues so you will continue to buy their individual niche products. If you don't have a clear picture of your risk profile and priorities, vendors are obliged to set them for you. Trusted security partners will provide options for assessing your risk posture and help you develop plans to make the most security impact for the least cost and complexity. Security needs to conform to and support your business priorities. Too often, vendors want your business to conform to their product portfolio.
• Vulnerable People are more of a risk than weak software. - There are 3 areas to be considered where security is vulnerable; 1) software 2) weak configuration and 3) people. The lion's share of the security market is focused on the so-called software vulnerabilities but not so much on the other 2 areas. The people factor is the largest uncovered area of risk. This is malicious code that doesn't leverage a vulnerability but rather leverages the vulnerable person. e.g. downloading a dancing skeleton for 'a spooky good time' (this was a trick employed by Storm), social engineering, spear phishing, etc. While we still need to find software vulnerabilities and patch them, we must understand that an organization is only as strong as its weakest link (the user). And more attention needs to be paid in mitigating the other two ways beyond software.
• Can Compliance threaten security - Compliance in and of itself is a good thing but it does not equal security. At the very least it's a resource and budget conflict and it can split our focus. Compliance is there to raise and maintain the minimum standard of security, but in its weakest form, it only maintains the minimum requirements.
• What is easy to measure is not always the most valuable - If you have 15 software vulnerabilities last month and record that 12 of them have been patched, is this a true reflection of your effectiveness. It is much harder to measure how effective end user training was to make administrators immune to social engineering attacks. You need to be compliant, but don't allow your entire risk strategy to sit back and relax, based on it.
• Vendor blind spots allowed for Storm - Storm is being copied and improved. The Storm era of botnets is alive and well, nearly two years from when it first appeared. How is this possible? 1. Botnets thrive in the consumer world where there is little money for innovation. Storm and its controllers know and survive on this. They are making money out of everything from spam to pump-and-dump stock scams. 2. They seem to be able to eat antivirus techniques for breakfast. A lot of the techniques and innovations used by Storm are not new; they are just being leveraged artfully against the blind spots of antivirus certifications and antivirus vendors. 3. Malcode does not need vulnerabilities. Most of the Storm recruitment drives have leveraged social engineering and play off of a holiday or sporting event. Go team!
  
• Product v Process - Security protection has established itself as a huge professional business. "Technology without strategy is chaos". The security market is too focused on the latest red hot top box or super scorching technology. The shear volume of security products and the rate of change has super-saturated most organisations and exceeded their ability to keep up. Organizations realize only a fraction of the capabilities of their existing investments. Furthermore, the cost of the product is often a fraction of the cost of ownership. There was a time when you could "do it yourself." But the simple days of Virus meets Antivirus are long gone. Highly effective organisations are embracing professional and managed security services to extend and augment their in-house expertise. By focusing your in-house expertise on what you know best i.e. your business, the scale comes from teaming with third-party expertise. This will be increasingly necessary in these tough economic times.

The primary goals for executives is to squeeze cost, whilst maximising profit and reducing complexity. Today we are seeing a massive convergence in the security market. In a guard-dog eats guard-dog world there are soon only going to be a few big dogs left and a bunch of smaller mutts. Will the consolidation dogfight lead to better efficiency or will it lead to a vendor lock-in?

As company leaders and executives continue to squeeze and simplify, they will face many choices. Simply following the reduction of vendors by consolidation, may fail to meet their needs and balance their fragile cargo; cost, complexity and risk. Do vendors have a responsibility in this equation? Will they rise to the challenge? True risk management can show how and where you can adjust and prune appropriate solutions,

The key is using risk management methodology to drive responsible simplification of business processes and to take control of the future.

Getting on top - Dominate your Credit Risk

Until recently, when debt became more expensive and harder to come by, companies generally had a blasé attitude toward managing their trade-credit risk. Most corporations, big and small, don't have credit risk procedures any more sophisticated than the sub prime lenders did. In which case you are flying in dangerous territory with your defenses down.

A simple tip but one that's been largely ignored until recently: Be more wary before extending credit to new customers. Make them prove their creditworthiness. Currently, companies take more a of shy unassuming approach to trade credit by quickly granting it to every new client that comes across their threshold. Once aboard they hope for the best and follow the client's payment performance over time.

Companies too often get into the habit of not asking for any financial information from their customers in favor of speeding up a much coveted deal. Suppliers have been doling out credit based on what little information may be available on their privately held clients, despite the fact that private firms have a higher rate of bad debt. Even after a credit account has been granted, the supplying company may shy away from asking for financial data because they don't want to offend a brand-new client. Clearly the banks have a part to play in all this because they too have been willing to extend credit lines far beyond reasonable doubt.

Companies should ask for customer and bank references up front. Although, that information may be biased and unreliable because of the struggling financial institutions. Will the bank and lenders be there in the long term for their customer? Are they going to provide financing or will they make a quick exit and leave the company with a liquidity shortfall, which may or may not cause the demise of the company? Are the financial institutes responsible for the ongoing viability of their clients, i.e. the corporate companies. What support and backup can they provide a struggling company when they themselves are in difficulty. These and many more, are all questions vendors need to ask themselves when looking over a customer's bank information.

Companies should request that all customers, new and old to fill out a one-page credit profile every year. The sheet should include the company's cash position and the most up-to-date contact information. A type of credit probe which may or may not provide the correct level of information in the right format, in a timely manner. This will lead to more overhead in the accountancy dept or with the business analysts, but if addressed properly, it may provide early warning of difficulties.

If there is any good news to be had during this economic downturn, it's that everyone is in the same boat. Your customers are asking their customers for more financial information. It's now become perfectly acceptable to ask about a client's financial status because everyone is being scrutinized by every supplier. Its a big global circle of accountants, checking each others assets.

If it's impractical to demand financial information up-front, then come up with a triggering number for when your company will demand it. A simple threshold or framework will suffice. If clients cross the established and agreed amount, then they must provide their trade creditors with financial statements to validate their credit. The type and level of the threshold can vary depending on client, industry, item value, uniqueness, development costs, credit exposure, etc. Its not a numerical value, its a way of thinking about and controlling your risk exposure.

Another way to improve your credit /risk management is to conduct a detailed assessment and calculate each customer's probability of default. With such precise knowledge you can price your services accordingly, and by showing your client the calculations, you can easily justify a premium rate. Cash has always been king and currently it is even more critical to companies health and financial welfare, but many companies have no idea who they're selling to, never mind who owns the company or their cash position. Its never been more critical to know your customer.

Moreover, suppliers can no longer rely on traditionally held views that big-name companies are safe from sudden and dire financial problems even if they don't have strong cash flow. Many of these companies have lived on extended credit lines for years and are not asset rich. Other companies can have negative cash flow and positive net worth. They're sitting on land or occupy buildings that no one's willing to buy. If their credit is pulled and they end up going bankrupt, the asset value won't cover the debts.

Experts also suggest sales and credit departments improve their communications between salespeople and the collections side. Your salespeople are trying to maintain the vendor /customer relationship at the same time as maximising their commission payments. This is a tightrope, and is a very dangerous situation for the company to ignore. It must be very, very tightly controlled. Don't allow salespeople to grant extended payment terms, without justification and authorisation, before checking in with their credit counterparts. Companies should use these negotiations to get more financial information out of their privately held clients and reprice future services if possible.

Moreover, salespeople may be able to offer the credit department more insight into a customer's financial situation. Therefore it is imperative that they have the influence, motivation and the time to actually get involved in credit and collections questions. Its a team effort and everyone better be on the team or the game is over.

Slash your credit exposure

The current credit slump and downturn gives companies an excellent excuse for demanding that customers share more financial information with them. This is not for the direct benefit of the customer but to keep on top of the clients' ability to pay and stay viable. You don't want the stream to dry up.

The distinction between dependable and unreliable customers has never been distinct and now it is even less so.

Corporate clients that are paying you on time may in fact be financially unstable and maintaining a good public image, could be delaying payments to other trade creditors. Should you be concerned?

At the same time, some customers may be withholding their payments, not because they're in dire straits, but because their banks is shortening their normal credit lines. More worrying is, if they are not willing to lend to them at all, in the near future.

Indeed, some companies want their suppliers to practically fill in as bankers, by extending payment terms and giving their working capital some room. Ifcustomers are asking their vendors to provide cash flow for them, then this is a very uneasy situation. If you have somebody who was once paying you every 30 days and is now paying you every 60 days, your own credit exposure is going to double. You have to evaluate if you want to take that kind of risk, at this time, with this customer.

It's never been an easy task especially now. Companies need to get a better handle on their corporate customers' ability to pay. Nearly one-quarter of publicly traded businesses worldwide are at risk of defaulting on their debt, according to some recent indexes of "troubled" public companies, whose default probability exceeds 1 percent. During the past 17 months, their risk-management firm's monthly barometer of 21,000 public companies in 30 countries has been creeping closer to the September 2001 all-time high of 28 percent.

What's less-known is how many private companies are at risk of defaulting on their promises to creditors. They tend to keep their vendors in the dark about even basic financial information. Their suppliers are sometimes stuck, relying on only basic bank information.

Of course, the rising number of hurting companies isn't news to accounts-receivables departments that have been well aware of their corporate clients' slipping ability to pay for several months. But there have been some surprises: Now, even customers once considered to be "excellent payers" are taking an extra month or more to pay their bills but then maybe their just taking advantage of your loose credit checks, risk profiling and accounting practices.

In fact, the trade group's latest monthly barometer of its members hit a record low of 40.1 in December. The survey asks 800 credit managers to rate favourable and unfavourable factors in their business cycle (unfavourable factors include rejections of credit applications, monetary unit {cash in} collections, and amount of credit extended). All those factors declined between December 2007 and December 2008.

The overall problem is, suppliers, especially small businesses need to tread carefully before pressing clients to pay up. Every company wants to keep their most valuable customers and not lose them to disagreements or hurt feelings over payment terms. The vendor-customer relationship is symbiotic, very personal and emotional.

However, no company wants to get burned by being too nice and seeing old invoices pile up or payments seized after a customer goes belly up. Trade-credit experts say that by the time you notice a customer is on the brink of insolvency, it's unlikely you'll get all the money that's due to you. So do your homework. Analyse your clients' risk profiles and get on top of your riskiest customers. Then you may have a chance to see the impending crash and minimize the damage to your receivables.

In particular, trade creditors want to avoid having to return payments received within the 90 days before a customer files for bankruptcy. Bankrupt companies can sue for those payments up to two years after they've entered bankruptcy court. So, if a company suspects a client is close to going under, the company can demand cash on delivery, payment in advance of a shipment, or a letter of credit. All of which are methods of payment that are not subject to preference claims.

Another way to avoid unexpected losses: Ask bankrupt customers to add your company to their critical vendor list. Depending on the bankruptcy judge's ruling, this group of vendors may be paid immediately over other suppliers if the debtor can show that the vendors' products or services are crucial to the company's survival and turnaround efforts. At this point the ship is on the rocks and you may just be looking around for flotsam to cling.

Lay-offs and litigation - lawyers win both ways

With potentially costly legal claims by dismissed employees soaring, employers need to make sure their job reduction and elimination plans are substantiated.

Nothing in life is free. While companies are jumping to reduce head count because they see an opportunity to save money in the short term and a way of openly validating those savings i.e. the economy is sinking. Be aware, they should be prepared for the possibility of punitive legal actions against them by aggrieved workers, and they need to consider how they can underwrite the accompanying legal costs.

The number of litigation actions is rising in tandem with the pace of job reduction and eliminations. These cases are boom-time for the defense and employment lawyers. They're seeing a major spike in their business that will not abate anytime soon. Its an ill wind, that usually helps some lawyer or other.

The main categories of lawsuits are those in which employees claim their dismissal was discriminatory, usually based on age and those, which requires advance notice for mass layoffs and plant closings.

Attorneys advise that cautious planning when making layoffs will help avoid a trip to court. They suggest that when you do decide to commit your company to a layoff of any size, then take good advice and plenty of time to make sure it's done right.

The Finance Dept. and accountants may not be directly involved in executing layoff plans, but with the risk of a sizable legal judgment, it gives them plenty of reason to stay involved. If only to satisfy themselves that the plan is legally and therefore, financially sound.

The first step in any staff reduction exercise, should be creating a detailed business plan that explains the need. Included in this will be;

• what facilities or businesses will be affected,
• the number of positions affected,
• what type of positions will be lost (What effect will this have on the future business)
  
• when the layoffs will occur, and
  
• how they will be announced,
  

All this must be clearly defined and approved before any actions are taken. There have certainly been some times when the legal or finance dept. have had to tell management to either come up with a more defensible reason for the layoff or rethink the decision. Analyse and assess the risk.

Juries will side with the employees when the employer doesn't have adequate documentation. Internally everyone is in such an emotional and stress driven crisis mode when they're involved in workforce reductions. Therefore, things that they may think are obvious to the world, are not. It pays to get an objective, knowledgeable view on these things.

The potential for discrimination lawsuits makes it essential that employers create an objective selection process for deciding which employees to let go. If 25 workers are dismissed and 20 of them, say, are over age 50, the chances of a lawsuit will rise dramatically. Its not to say don't do it its just to say, be prepared to defend your decision in court.

Is you wish to be seen to be logical and fair about the selection process, then some lawyers suggest that executives create a list or matrix of criteria for evaluating employees. This can include;

• years of service,
• qualifications,
  
• experience in the field,
  
• job performance,
• team working ability,
  
• disciplinary history.
  

A weighting should be assigned to each criterion, and each employee should receive a numerical rating in each category. Clearly if only one person is allowed to do this, then it will only be one persons opinion and that is difficult to defend.

To avoid subjective bias and statistical anomalies, companies should consider hiring a statistician to objectively evaluate the layoff selection criteria and ensure that none of them is in itself discriminatory.

It may prove difficult to avoid exceptions to the process. For example, a job-performance measure may take into account employees' past three annual reviews, but some people will have been hired more recently. Diligently document and explain in detail any reason for deviation or breaking from the official process.

But even a thoroughly objective selection process, while defensible in court, is no guarantee a lawsuit won't be filed. As a further safeguard, companies should conduct an impact analysis of how layoff decisions will affect the makeup of each protected class of employees. If a protected group is disproportionately affected, the plan will look discriminating and the company may want to alter it accordingly.

A company's legal concerns don't end with the selection process. Executives who deliver the bad news must tread carefully with their word choices so as not to come across as apologetic or sugar-coat the real reason the employee is being dismissed.

By saying, 'This isn't your fault, this is our fault,' you will be falling on your own sword." The employee can easily use such a loose statement against the company in court.

Watch out for a rise in the number of whistleblower cases coming from former employees. As more and more people get terminated, there's going to be more and more litigation and cries of protest.

Red Flags - Customer's falling credit status

When it comes to credit risk profiles, watch closely for these red flags in the companies you depend most on for financial stability, your customer.

The stringent credit markets make spotting a soon-to-be insolvent company increasingly difficult. It's difficult to determine who's really on the edge and ready to go out of business, versus who is having tough times and struggling, but will survive.

To avoid losing future payments, companies should be on the constant lookout for red flags. Signs that a customer is having serious financial problems. The following don't necessarily indicate that a client is on its knees or in contingency mode. But depending on how any of them are relevant, should trigger a warning bell for your credit department. Worst case, the customer deserves close monitoring, and perhaps their payment terms renegotiated.

Changing Payment Patterns.
Perhaps the most obvious clue that something could be financially amiss, but one that cannot be ignored, particularly these days. Previously reliable customers that suddenly start missing due dates warrant attention: If your customer is falling further and further behind in making payments on their invoices, that certainly should be a tip off that something may not be right.

Renegotiation requests
If a company asks to spread payment windows from 30 days to 45 or 60 days, this should raise eyebrows. Hone your credit skepticism on requests to reschedule payment agreements, such as paying off one service over four months rather than all at once, as previously agreed upon.

Shifting Buying Habits.
Even if regular customers are paying on time, are they still purchasing? Examine and analyse the trends. If their previous buying was consistent, but their manner of placing orders has changed, this could suggest trouble. Also, keep a lookout for regular customers that suddenly start buying more. Pre-bankrupt companies have been known to stock up on inventory, knowing they won't be liable for the goods later on. This is a very unpleasant maneuver and should be stopped. Fix your customers' credit /risk profiles and keep them within their credit thresholds.

Rejection levels, Haggling or Higher Demands.
Is your customer returning items more often, or unjustifiably asking you to make deductions off invoices because of damages? Customers that start making unreasonable demands on delivery are sending you a warning. Your customer, may start saying his company expects a discount if a shipment doesn't arrive within very tight deadlines, especially if he knows that you can barely meet. Be warned and look behind the request.

Shrinking Cash Flow.
Keeping a close watch on your customers' cash balances over time, is what the good companies do all the time, if you have access to their financial statements. Find out how much they rely on equity, short-term debt, or long-term debt and adjust their credit /risk profile accordingly.

Large Accruals.
Many distressed companies carry sizable accruals on their balance sheets, so these figures need to be explored and justified. First you need to get access to their balance sheets, that in itself may cause difficulty and could also give an indication of solvency.

Tight Lips.
Customers that previously shared financials with your company, but now suddenly claim it's against their policy to share financial data. This should only make you more determined to find the true picture but if in doubt, err on the side of extreme caution. Shorten their credit lines until they come up with strong evidence to convince you.

High DSO (Days Sales Outstanding).
Companies that have fallen behind on collecting their own receivables may be unable to contribute to yours.

Managerial Shuffling.
Unexplained or questionable changes in management could mean that there's a disagreement between executives and the company's board or owner. More obvious signs of trouble in this regard would be the hiring of a chief restructuring officer or turnaround company. Its a warning flag, but at least they are addressing their issues. Tighten credit lines in the short term, til the re-structure is effective and things improve greatly.

Persistent Rumors.
Credit experts recommend keeping your ears open for any negative news about your customers, which may be the only way to garner helpful financial information about privately held clients. Pay attention to news articles, whispers from your sales teams, and other companies' credit managers. There are industry-specific credit groups that are invaluable for uncovering past-payment records of customers, search for them and make friends with them.

Tax Liens.
A tax lien against a company is the number-one indicator that it's going under. If a customer has postponed paying its taxes, you're not likely to see its overdue payments either. Sound the alarm!

The People Power Triangle

I have composed a simple diagram that illustrates the 3 most important things you need in life or business, to truly succeed. At the risk of patronising you, let me point out the message.

To gain Authority, People need Knowledge and Experience.
To gain Knowledge, we need Money to pay for our studies.
To gain Experience, we need to spend Time applying our Knowledge.