What can go wrong? Part 4

I’m sharing with you another true story.

This is from a client friend of ours.
We had done business with him for years.
We believed he was honest. And he was.
He is the victim of this true story.

Jim sold office equipment.
He sold us our first fax machine.
That gives you an idea how long ago this happened.
I recalled the early fax machines.
They were barely readable.
Jim assured me this machine was top of the line.
“Let me put it in your office for 30 days,” he said.
“You’ll beg me not to take it out then.”
I thought he was nuts but agreed to the test.
He was right. The machine was excellent.
I didn’t wait 30 days to say we’d buy it.

Jim advertised his business with us.
He had a good credit rating.
We had never had trouble with his checks.
One day we realized his account was overdue.
Way overdue. More than 90 days overdue.
This was unusual. It had not happened before.
I called Jim. He said he had paid us.
He said he recalled signing the checks.

We double checked with the bank.
Was it our mistake?
No. The bank had received no checks either.
He finally had his accountant audit the books.
He found his trusted bookkeeper was embezzling.
She was changing our checks and depositing them.
Our money was going into her account.

I could have kicked myself for not acting sooner.
That was an important lesson.
Check your receivables regularly.
Don’t let accounts go into the 30-day column.
Call or go see them if that happens.
The older the receivable, the harder it is to collect.

Next week we’ll discuss protecting your business.
These strategies will help you sleep better each night.