“If there’s anything Bernie Madoff taught us, it’s that we as owners and people responsible for our businesses have to be paying more attention than ever,” said Rod Ballard, a CPA from Jackson Thornton, who gave riveting advice for attendees of the recent Small Business Survival Kit: Tips for Surviving Today’s Economy.

“Madoff is responsible for the fraud,” Ballard said. Business owners are responsible for paying attention and knowing what’s happening in their businesses.

“Fraud hits small businesses disproportionately,” Ballard said. Many times that’s because the accounting functions are turned over to a trusted employee. As a precaution, he recommends that business owners personally open and review their bank statements each month. If something’s amiss, the next step is to contact an attorney, CPA or other appropriate party.

The seminar, which was sponsored by the Small Business Administration and held in downtown Montgomery this past spring, was also supported by U.S. Congressman Bobby Bright.

“I know you’re going to get some good information,” Bright told the full room assembled for the series of speakers who gave guidance on financial health, government contracts, capital access, marketing, credit repair and legal strategies. “I truly feel having strong small businesses across this country is the element we need to come out of this economic downturn."

Ballard’s role in the seminar was to discuss “Avoiding or Getting Out of a Hole,” which hinges on personal involvement in the details of business. To determine financial health, he said, “I want you to take the temperature of your business.” That’s done by checking cash, with three options for results: up, down or the same.

“You’re comparing what cash actually is to what it should be,” Ballard said. “Take the temperature of your business by looking at what happened in the past.” That includes taking a look at deposits for each month, each week or whatever time table fits best and then looking at how much has been spent.

“Look at the inflow and the outflow,” he said. Once owners check their cash, the next step is to get behind the numbers, make comparisons and ask why.

“A budget is never worthwhile unless you compare action to it,” Ballard said. One simple form of budgeting is known as SALY, or same as last year. “It may not be very accurate but it’s a starting point,” he said.

Cost control is another key area. “Pay attention to what’s going out,” Ballard said. Check to see if there are ways to postpone or reduce purchases. Those prepaying invoices to save two percent, should ask if that savings is worth the effect it has on cash flow.

“The biggest outflow of cash is personnel,” Ballard said. He noted that there are a number of options for businesses to consider, including hiring full time vs. part time, or turning to contract workers or temporary workforce.

It’s also important for business owners to seek ways to induce people to pay faster. Inflow of cash is, of course, dependent on collections. Making personal phone calls, collecting physically if possible, working out a payment plan or stopping work if contractually allowed are among the alternatives. “Keep in mind your range of legal options,” Ballard said.

Ballard also recommended that each business owner have a set of go-to people. With a reference to the book, The Five People You Meet in Heaven, he said, “There are six people you need to know on earth: your elected officials, your SBA representative, your banker, your attorney, your CPA and your preacher.”