Eight Ways to Avoid Rip Offs

Your greatest risk of financial collapse can come from your closest financial advisors, the guys you trust and whose advice you rely upon. Most dealers believe their experts and professionals faithfully report to them, as client, every bad thing they discover; that they protect you against serious error and theft in every way within their power. Dealers spend tens of thousands on audits, inventories

Your greatest risk of financial collapse can come from your closest financial advisors, the guys you trust and whose advice you rely upon.

Most dealers believe their experts and professionals faithfully report to them, as client, every bad thing they discover; that they protect you against serious error and theft in every way within their power.

Dealers spend tens of thousands on audits, inventories and financial reports to gather information believed to be correct, confirmed, and inclusive of their accountant's complete understanding. Moreover, dealers entrust their accountants and auditors to watch the back office, so they can work the front.

When CPAs and other auditors fail to report, they not only deprive dealers of vital information, they render dealers vulnerable to predators and thieves.

These outside advisors, who take their lead from your staff, are relieved of the time it would take them to work independently. More money, less time. Life is easier designed around accepting, rather than challenging, information.

With this method, all your accountant has to do is punch in data and print out a bill. Not only is the resulting information potentially false, the process gives comfort and opportunity to thieves.

The more you trust auditors and staff, the more likely they can collaborate against you. Accountants lacking devotion to their clients will hide behind the excuse that they have no obligation to challenge numbers, report breakdowns in process or expose errors in calculation.

Laziness and a lack of duty can enable the misdirection of millions of dollars — your millions. A false appearance of competency is as treacherous as inaccuracy.

You probably think you'd pick up a vibe if things were seriously out of whack. You walk your lot. You get reports. You conduct meetings and see deals. Maybe you even look at comparisons of your store to others to see that your numbers are “in line.”

Bunk! All of that may feel like a belt and suspenders. Those who steal you blind or stand by and watch it happen will later throw in your face that you were foolish to trust them.

If you are fighting such scoundrels, you are not alone. If you've been victimized by professionals and experts, and aren't fighting back, contact me for ideas on things you may be overlooking.

If you suspect you've been victimized, consider the following steps.

Step 1. Get someone on your side. Your trust is a tool that unscrupulous insiders and accountants will use against you.

Step 2. If you are being ripped off, most likely it is by the people who you let in. The more charming and smart your “regular” team, the easier they can take advantage. They're called “con-men” because they prey on your confidence.

Step 3. Design a plan that reports (not just exposes) errors, great and small. Get help and don't assume you know all the tricks. Today's technology enables shady activities you might be unfamiliar with.

Step 4. Get information quickly and directly, including early warning signs.

Step 5. Don't allow your professionals to report to your managers or be managed by them. Unscrupulous professionals will cover for those who do their work for them.

Step 6. Don't automatically trust self-proclaimed experts or their credentials. Credentials only mean there's a trade lobbyist somewhere with an excuse for why you deserved to be cheated.

Step 7. Recognize that your accounting system and accountant can operate with a strong incentive to give you the greatest belief in success with the least effort and liability on their part.

Step 8: Trust only what you test. If you don't know how, bring someone in who does. If your people begin to sweat at the mere prospect of that, you should be sweating, too, but for a different reason.

Future columns will expose more bad guys and the details of their schemes against dealers.

Peter Brandow is a veteran dealer in Pennsylvania and New Jersey.

Questions or comments about this column? Send us an e-mail at [email protected].

TAGS: Dealers Retail
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish