How Fraud and Scams Affect Small Businesses—and How to Move Forward

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Fraud and scams are more than just occasional risks for small businesses—they’re a growing threat that can damage finances, reputation, and even long-term viability. From fake invoices and phishing emails to employee theft and cyberattacks, the impact can be devastating.

Small businesses often lack the resources and safeguards that larger organizations use to detect and prevent fraud. That makes them attractive targets for scammers—and particularly vulnerable to lasting harm.

In this article, we’ll explore how fraud and scams affect small businesses, common warning signs, and what steps owners can take to recover and protect their future.

The Real Cost of Fraud for Small Businesses
Fraud can take many forms, but the consequences often look the same:

  • Financial loss: Fraud can wipe out bank accounts, damage cash flow, and derail budgets.
  • Reputational damage: Customers may lose trust if data is compromised or if fraud becomes public.
  • Legal and compliance risks: Businesses may be liable for data breaches or face lawsuits from affected parties.
  • Operational disruption: Time, energy, and resources are diverted from growth to crisis management.
  • Emotional toll: Owners and staff may experience stress, mistrust, and anxiety after being targeted.

According to the Association of Certified Fraud Examiners (ACFE), small businesses lose an average of 5% of their annual revenue to fraud, and nearly half of them don’t recover fully.

Common Types of Fraud and Scams Targeting Small Businesses

  • Email and phishing scams: Fraudsters impersonate vendors, customers, or executives to trick employees into sending money or sharing sensitive information.
  • Fake invoices: Scammers send legitimate-looking bills for products or services that were never ordered.
  • Payroll fraud: Employees falsify hours, inflate expense reports, or issue payments to fake vendors.
  • Credit card or payment fraud: Cybercriminals use stolen card details to make fraudulent purchases or steal payment data.
  • Business identity theft: Scammers use a company’s information to open fake credit lines or apply for loans.
  • Vendor scams: Fraudsters pose as suppliers, especially during procurement, and redirect payments to their own accounts.


How to Spot the Warning Signs

  • Sudden unexplained financial shortfalls
  • Duplicate or unusual payments to the same vendor
  • Missing inventory or supplies
  • Vendors or customers claiming unpaid balances despite records
  • Employees reluctant to take vacations or overly protective of their roles (a red flag for internal fraud)
  • Unexpected emails or calls requesting sensitive information or urgent wire transfers

What to Do If You’ve Been Targeted

1. Act quickly: Time is critical. Notify your bank, credit card companies, and law enforcement as soon as you suspect fraud.

2. Document everything: Keep a detailed record of all communications, transactions, and losses related to the incident.

3. Inform stakeholders: If customer or vendor data was compromised, notify them promptly and transparently.

4. Report the fraud:

  • To your bank or payment processor
  • To the FBI’s Internet Crime Complaint Center (IC3)
  • To your local police department
  • To the Federal Trade Commission (FTC)

5. Review your insurance: Check if your business insurance includes fraud or cybercrime coverage—and file a claim if applicable.

6. Get professional help: Consult a lawyer or forensic accountant to assess the damage and support recovery efforts.

How to Move Forward and Prevent Future Fraud

1. Strengthen internal controls

  • Separate duties (e.g., the person who cuts checks shouldn’t reconcile the bank account)
  • Require dual approval for large payments
  • Conduct regular audits, even in small teams

2. Train employees
Teach staff how to recognize phishing emails, invoice scams, and fraudulent behavior. Make fraud awareness part of onboarding and ongoing training.

3. Use secure technology

  • Use reputable accounting and payroll software
  • Enable two-factor authentication
  • Regularly update software and back up data

4. Vet vendors and partners
Always verify new vendors before sending payments. Confirm any changes to payment details with a phone call to a known contact.

5. Monitor financial activity regularly
Review your financial statements and bank activity often. The sooner you catch something suspicious, the better your chances of minimizing damage.

Final Thoughts
Fraud and scams are a painful reality for many small businesses—but they don’t have to define your future. Taking swift action to recover and adopting strong preventive practices can help rebuild trust, restore stability, and make your business more resilient than ever.

The key takeaway? Stay vigilant, educate your team, and treat fraud prevention as an essential part of your business strategy—not just an afterthought. In today’s fast-moving digital world, protecting your business is just as important as growing it.

S-Corp SALT Workaround in 2025: What Utah S-Corp Owners Need to Know

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Updated for the 2025 increase of the SALT deduction cap from $10,000 to $40,000.

📌 Quick Summary

Starting in 2025, the federal SALT (State and Local Tax) deduction cap increases from $10,000 to $40,000. This is a major shift for S-Corp owners who used Utah’s PTET workaround to bypass the previous limit.

With a much higher personal deduction threshold, the PTET workaround becomes less necessary—but still strategically useful in certain cases.

This guide explains when Utah business owners should (and shouldn’t) continue using PTET in 2025.

1. What Is the SALT Workaround for S-Corporations?

During the years when federal SALT deductions were capped at $10,000, states (including Utah) created a workaround called:

Pass-Through Entity Tax (PTET)

This allows an S-Corp to pay the owner’s state income tax at the business level and deduct it as a business expense—avoiding the individual SALT cap.

Example under 2024 rules:

  • Utah tax: $15,000
  • Individual SALT limit: $10,000
  • PTET bypasses the cap
  • Entire $15K becomes a business deduction → reduces federal taxable income

This was an extremely valuable strategy for many small business owners.

2. What Changes in 2025?

Beginning January 1, 2025:

The SALT deduction cap increases from $10,000 to $40,000.

This means:

  • Most Utah S-Corp owners can now deduct a much larger portion of their state taxes personally
  • The PTET workaround becomes optional, not essential

Does PTET go away?

No — Utah still allows PTET.
But the math changes in 2025.

Now the question is:
Does the PTET deduction save more than the QBI deduction it reduces?

For many owners, the answer is no.

3. When PTET Still Makes Sense in 2025

Even with a $40,000 SALT deduction available personally, there are situations where PTET still produces better outcomes.

✔ 1. When your state tax exceeds $40,000

High-income earners may still benefit.

Example:

  • State tax owed: $62,000
  • Personal deduction cap: $40,000
  • Remaining $22,000 is nondeductible personally
  • But PTET allows the entire $62,000 to be deducted at the business level

This is still a major PTET advantage.

✔ 2. When you claim the standard deduction

If you do NOT itemize, personal SALT deductions are worthless.

In this case, PTET creates a new business deduction that would otherwise be lost.

✔ 3. When you want to reduce K-1 income

PTET lowers federal K-1 income, which can:

  • Reduce federal tax
  • Reduce 3.8% Net Investment Income Tax
  • Reduce phaseouts tied to AGI
  • Improve certain credit qualifications

This remains a planning tool, even in 2025.

4. When NOT to Use PTET in 2025

There are now more situations where PTET hurts more than it helps.

❌ 1. When PTET reduces your QBI deduction

Because:

  • PTET reduces K-1 income
  • Lower K-1 = lower QBI deduction (20%)

If lowering QBI costs more than the PTET deduction saves → PTET is a bad deal.

This will apply to many small and mid-sized Utah S-Corp owners.

❌ 2. When your Utah taxes fall under the new $40,000 SALT cap

If:

  • Your Utah tax < $40,000
  • You itemize deductions

Then you can deduct 100% of your state tax personally without reducing QBI.

PTET offers no advantage, and may reduce QBI unnecessarily.

❌ 3. When you already itemize (mortgage, charity, state tax)

If you are already itemizing, a larger SALT cap makes personal deduction more efficient than PTET.

5. Examples: PTET vs Personal SALT Deduction in 2025

📘 Example 1: PTET Helps

  • Utah tax: $55,000
  • Personal SALT cap: $40,000
  • $15,000 would be nondeductible personally
  • PTET allows full $55K deduction at entity level

PTET is the better option.

📕 Example 2: PTET Hurts

  • Utah tax: $18,000
  • Well under the $40K cap
  • Owner itemizes
  • K-1 income: $150,000
  • PTET would reduce K-1 → reduces QBI deduction by ~$3,600

Paying SALT personally is superior.

6. Strategic Recommendation for Utah S-Corp Owners in 2025

Recommended for MOST business owners in 2025:

✔ Pay your state tax personally
✔ Itemize and use the increased $40,000 SALT cap
✔ Preserve the full QBI deduction

Use PTET only when:

  • Your state tax exceeds $40K
  • You take the standard deduction
  • You must lower K-1/AGI for tax purposes
  • You’re subject to NIIT or phaseouts

7. Madsen & Company’s Advisory Approach

Because of the new SALT cap, PTET is no longer an automatic strategy.

We now run:

  • Side-by-side QBI comparisons
  • PTET vs personal SALT deduction analyses
  • Itemized vs standard deduction projections
  • Full 2025 tax strategy optimization

This ensures you choose the path that minimizes your total tax, not just one line item.

8. Final Takeaway

In 2024, PTET was usually the best choice.

In 2025, the increased SALT deduction changes everything.

For most Utah S-Corp owners, PTET will NOT be the best option in 2025.

But for high-income or high-tax situations, it can still be a powerful tool.

If you want a custom PTET vs SALT analysis for 2025, Madsen & Company can run the numbers and show the exact tax difference.

Mastering Business Budget Forecasting: A Key to Smarter Financial Planning

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Budget forecasting is a vital tool in the arsenal of any successful business. It enables leaders to make informed decisions, anticipate financial outcomes, allocate resources wisely, and steer the company toward long-term sustainability. Whether you’re a startup planning your first fiscal year or an established enterprise aiming for growth, mastering budget forecasting can be the difference between thriving and merely surviving.

What Is Business Budget Forecasting?
Budget forecasting is the process of estimating your business’s future financial performance based on historical data, current trends, and projected growth. Unlike a static budget, which outlines planned expenses and revenues for a specific period, a forecast is a dynamic model that evolves with changing conditions.

Forecasts can be short-term (monthly or quarterly) or long-term (annual or multi-year), and they help businesses:

  • Anticipate revenue
  • Manage expenses
  • Adjust strategies in response to market shifts
  • Secure funding or loans
  • Evaluate the feasibility of new initiatives

Key Components of a Budget Forecast
To create an effective forecast, you need a clear picture of both your income and expenses. Here are the core elements:

1. Revenue Projections
Estimate how much income your business will generate from sales or services. Use:

  • Historical sales data
  • Market trends
  • Sales pipeline analysis
  • Seasonality and economic indicators

2. Cost of Goods Sold (COGS)
Estimate the direct costs associated with producing your goods or delivering services. This helps determine gross margin.

3. Operating Expenses
Include fixed and variable costs such as:

  • Rent and utilities
  • Salaries and benefits
  • Marketing and advertising
  • Software and subscriptions
  • Professional services

4. Capital Expenditures
Plan for one-time or infrequent purchases like equipment, vehicles, or property upgrades.

5. Cash Flow and Working Capital
Factor in when money actually moves in and out, not just when it’s earned or incurred. A budget forecast should align closely with your cash flow forecast.

Steps to Create a Budget Forecast
1. Review Past Financial Performance
Start with a detailed analysis of your historical financials. Identify revenue patterns, seasonal fluctuations, and fixed vs. variable costs.

2. Set Clear Objectives
Are you aiming to grow, cut costs, expand into new markets, or maintain stability? Your goals will shape your assumptions and priorities.

3. Make Assumptions
Forecasting relies on assumptions about pricing, customer growth, market demand, inflation, and costs. Be realistic—and document these assumptions clearly.

4. Build the Forecast
Use spreadsheet software or financial forecasting tools to project revenue and expenses over your chosen time frame. Consider creating multiple scenarios:

  • Best-case scenario: Optimistic growth, strong sales
  • Worst-case scenario: Market contraction, higher costs
  • Most likely scenario: A balanced, data-driven estimate

5. Monitor and Update Regularly
Business conditions change. A good forecast isn’t static—it should be reviewed monthly or quarterly and adjusted based on performance and new data.

Tools and Software for Forecasting
Manual spreadsheets work for small businesses, but as complexity grows, consider tools like:

  • QuickBooks, Xero – For basic budgeting and tracking
  • Float, Fathom, LivePlan – For forecasting and cash flow planning
  • Excel with custom templates – For more control and customization

Common Forecasting Mistakes to Avoid

  • Overestimating revenue: Be conservative and base estimates on solid data.
  • Underestimating expenses: Don’t forget hidden or irregular costs.
  • Ignoring market trends: Economic shifts, regulations, and competitor moves matter.
  • Failing to update: Outdated forecasts are useless. Regular reviews are essential.
  • Relying on one scenario: Always plan for contingencies.

The Strategic Value of Budget Forecasting
Beyond financial control, budget forecasting fosters strategic thinking. It encourages:

  • Data-driven decision-making
  • Agility in uncertain times
  • Improved investor confidence
  • Accountability across departments

It’s not just about numbers—it’s about being proactive, resilient, and competitive.

Final Thoughts
Budget forecasting is not a one-time task; it’s an ongoing discipline that should be baked into your business operations. By forecasting carefully, you can avoid surprises, seize opportunities, and lead with confidence.

Remember: A business without a forecast is like a ship without a compass. Chart your course, check it often, and be ready to adjust with the tides.

Tired of Typing? Use Recurring Transactions In QuickBooks Online

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QuickBooks Online is good at saving you time and keystrokes. Here’s another way it helps avoid duplicate data entry.

Accounting is a repetitive process. As you prepare invoices and receipts and bills, and other sales and purchase forms, you undoubtedly grow weary of typing the same information over and over. Customer and vendor names, addresses, product and service descriptions – you practically memorize these details if you have to enter them frequently.

QuickBooks Online does that memorization for you. Once you’ve entered a detail like a customer’s shipping address or the cost of an item, you never have to supply it again. You only have to select data from lists when you’re creating a purchase order, for example.

But the site goes further. If you have to enter transactions on a regular basis that are identical or nearly identical, QuickBooks Online allows you to save them as recurring templates. When it’s time for them to go out, it gives you options for dispatching them depending on the need for any tweaking. Here’s how it works.

How Do You Make Transactions Recur?

The process is very simple. You start by creating a transaction that you’d like to repeat at intervals you specify. For example, you might send monthly invoices to some customers for lawn services. Enter the invoice details like you normally would, selecting a customer and the item or service descriptions and any other information that needs to be included.

When you’re done, click the Manage icon in the upper right, scroll down in the panel that opens on the right, and click Scheduling, then toggle on the button next to Make invoice recurring. In the Template name field, give it a descriptive name that you’ll associate with the invoice. Then click the down arrow in the field under Type.

QuickBooks Online gives you three options for managing your recurring transactions.

There are three ways you can ensure that the invoice goes out at its specified interval. They are:

● Scheduled. If you select this, your transaction will go out as scheduled with no intervention from you. Only the date will change. We urge caution with this one. Be sure you won’t want to change anything.
● Reminder. QuickBooks Online will send you a reminder ahead of the scheduled date. You can specify how many days ahead you should receive it. Then it’s up to you to make any necessary changes and send it out.
● Unscheduled. QuickBooks Online will do nothing except save your template. You can modify and use this at any time that’s appropriate.

Deal with the other Template options and scroll down to set up intervals and starting/ending dates if necessary. If you choose Unscheduled, you can save the template. For Reminder and Scheduled, though, be sure to complete the fields at the bottom of the pane before saving.

If you’re creating a Scheduled or Reminder invoice template, you’ll need to complete the fields at the bottom of the Recurring settings pane.

NOTE: These instructions are based on QuickBooks Online’s new invoice format. It’s possible that your account is still using the old format. If that’s the case, or if you’re creating another type of transaction that will recur (like a bill) you will see a link at the bottom of the form that says Make recurring. Your other options will remain the same.

How Do You Use Recurring Transactions?

When you want to modify or use a recurring transaction, click the gear icon in the upper right of the page and select Recurring transactions under Lists. A table containing all of the ones you’ve created will open. There are multiple columns in this table that provide a lot of information about each transaction. They are Template Name, Type, Txn (Transaction) Type, Interval, Previous Date, Next Date, Customer/Vendor, and Amount.

● The final column, Action, lists the options you have for each type of recurring transaction. For Unscheduled Invoices, you’ll most likely Use them, though you can also Edit them. If you set up a transaction as a Reminder, you can do the following to it:
● Edit (edit the template, not the transaction)
● Use (opens the original transaction that you can edit, save, and send)
● Duplicate (duplicate the template)
● Pause (stop sending reminders temporarily)
● Skip next date
● Delete

Your time as a business owner is valuable. Don’t waste any of it doing duplicate data entry. Creating recurring transactions in QuickBooks Online is one way of minimizing keystrokes and using the time savings to manage other elements of your business. If you have any questions about what we discussed here or are struggling with any other features in QuickBooks Online, don’t hesitate to contact us to schedule an appointment.

How to Properly Manage Your Business Cash Flow

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Cash flow is the lifeblood of any business. Regardless of how innovative your product is or how many sales you generate, if there’s not enough cash available to cover day-to-day expenses, your business could quickly find itself in trouble. Managing cash flow effectively ensures your company remains financially healthy and resilient during economic ups and downs. Here’s a comprehensive guide to help you properly manage your business cash flow.

1. Understand What Cash Flow Really Means
Cash flow refers to the movement of money in and out of your business. There are two types:

  • Positive Cash Flow: More money is coming in than going out.
  • Negative Cash Flow: More money is leaving than coming in.

While short-term negative cash flow may not be fatal, persistent issues can lead to insolvency. Understanding the timing and sources of cash inflows and outflows is critical.

2. Forecast Your Cash Flow
Creating a cash flow forecast helps anticipate future cash shortages and surpluses. This should be a rolling forecast, updated monthly (or even weekly) to reflect changes in the business environment.

Key components of a forecast include:

  • Projected income (sales, loans, investments)
  • Fixed and variable expenses (rent, utilities, payroll, inventory)
  • One-off expenses (equipment, marketing campaigns)

By forecasting ahead, you can spot potential issues and plan how to deal with them before they become serious problems.

3. Accelerate Receivables
Waiting too long to collect money can starve your business of needed cash. Implement strategies to speed up receivables:

  • Send invoices promptly
  • Offer early payment discounts
  • Use digital invoicing systems
  • Follow up on overdue payments quickly
  • Consider invoice factoring if needed

4. Manage Payables Wisely
While it’s tempting to pay every bill as soon as it arrives, good cash flow management means holding onto cash as long as it makes sense:

  • Take full advantage of supplier payment terms
  • Negotiate better terms when possible
  • Avoid late fees, which can damage supplier relationships

Be strategic: prioritize payments that affect operations (payroll, rent, key suppliers) and delay less critical expenses if needed.

5. Control Inventory Levels
Excess inventory ties up cash that could be used elsewhere. Use inventory management systems to track usage trends and optimize purchasing:

  • Implement just-in-time (JIT) inventory where feasible
  • Identify slow-moving stock and find ways to liquidate it
  • Work with suppliers on flexible ordering

6. Build a Cash Reserve
Having an emergency cash cushion can prevent panic during slow periods. Set aside a percentage of profits each month until you have 3–6 months of operating expenses saved.

7. Monitor and Analyze Cash Flow Regularly
Use accounting software or dashboards to monitor your cash flow in real time. Regularly analyze key metrics like:

  • Operating cash flow
  • Days sales outstanding (DSO)
  • Days payable outstanding (DPO)
  • Cash conversion cycle (CCC)

Reviewing this data will help you spot patterns and make better financial decisions.

8. Cut Unnecessary Costs
Lean operations often translate into stronger cash flow. Audit your expenses regularly:

  • Cancel unused subscriptions
  • Outsource non-core functions
  • Switch to cost-effective suppliers
  • Automate routine tasks to reduce labor costs

9. Secure Financing Before You Need It
If you foresee a future cash gap, explore financing options early while your financials are strong:

  • Business lines of credit
  • Short-term loans
  • Equity investment

Having financing in place can provide a buffer during lean periods without panic borrowing.

10. Educate Your Team
Cash flow isn’t just the finance department’s concern. Train department heads and team leaders on budgeting, purchasing, and financial responsibility. A company-wide culture of financial awareness leads to smarter spending decisions across the board.

Final Thoughts
Properly managing your business’s cash flow isn’t just about survival—it’s about building a strong foundation for sustainable growth. With proactive forecasting, tight control over receivables and payables, strategic spending, and continuous monitoring, your business will be better prepared to weather financial challenges and seize new opportunities.

Remember: Revenue is vanity, profit is sanity, but cash is king. Treat it that way.

3 Ways to Receive Payments in QuickBooks Online

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Got customer payments coming in? QuickBooks Online has multiple ways to accept and record them.

One of the biggest challenges small businesses face is managing a steady cash flow. Keeping income ahead of expenses is a constant balancing act. QuickBooks Online can help. With easy-to-use forms and a convenient mobile app, it helps you track and deposit incoming payments with ease.

Do you ever receive instant payments for certain products or services? Ever need to record a sale on the go—both for your records and your customer’s? Or maybe you send out invoices and want to ensure payments are accurately logged once they come in. QuickBooks Online has you covered in all these scenarios. Plus, it offers automation tools that speed up the payment process—so you can get paid faster and focus on growing your business.

Let Customers Pay Online

If your business sends invoices for products or services, QuickBooks Online makes it easy to record customer payments. While you can manually enter payments, there’s a faster, more efficient option: QuickBooks Payments. This built-in merchant service lets you accept credit card and bank payments electronically—helping you get paid quicker and streamlining your cash flow.

Once QuickBooks Payments is set up in QuickBooks Online (contact us if you need help), your invoices will include integrated payment options for credit cards and electronic checks. Each invoice will feature a payment button, allowing customers to easily enter their payment information. You’ll be able to track when an invoice is viewed, paid, and deposited. Simply open your list of invoices and click on one to view its details. A timeline panel will slide out from the right side, showing the invoice’s history and status. Plus, you can opt to receive notifications for invoice activity.

If you prefer to record payments manually, find the unpaid invoice in your list and click the Receive Payment link at the end of the row. This opens the Receive Payment screen, where you can fill in any missing details and save. You can also find the same link on the invoice screen itself or from the Invoices page (SalesInvoices).

You can receive payments manually in QuickBooks Online from an invoice itself or from the Invoices page.

There’s no cost for setting up a pay-as-you-go account in QuickBooks Payments. There are only per-transaction fees:

●     ACH bank payments are 1%.

●     It’s 3.5% if the payment comes in through an invoice (Apple Pay, Google Pay, credit cards, etc.) or if the payments are keyed in. 

●     If you swipe a card, you’ll pay 2.4%

There’s also a $0.30 fee per transaction. Transaction fees are slightly lower if you pay $20 per month. Payments that come in before 3 p.m. PT should be in your account the next business day. 

Accepting Payments Through GoPayment

To take payments while you’re on the road, you’ll need a free mobile card reader from Intuit that connects to your smartphone. It supports tap, chip, and digital wallet payments. You can also manually enter card details (see above rates). To process transactions, you’ll need to download the GoPayment app, available for iOS and Android. The app lets you add product names, prices, and images to make checkout faster and easier. Multiple layers of security are in place to help protect your data during mobile transactions.

Receiving Instant Payments

Sometimes, you’ll receive payment right after delivering a product or service. In these cases, QuickBooks Online allows you to create and provide a sales receipt on the spot. Just click +New in the upper left corner, then select Sales Receipt in the Customers section. The form that opens will look similar to an invoice or estimate. Choose the customer in the upper left corner, and fill out the remaining details as you normally would. When you’re finished, click Save and send to email the receipt. You’ll have the option to preview it before sending and to print it.

The Undeposited Funds Account

The Undeposited Funds account in the QuickBooks Online Chart of Accounts

If your customer paid you on the spot with a credit card, that payment would be processed in your QuickBooks Payments merchant center. But what about a physical check? QuickBooks Online defaults to the Undeposited Funds account for sales transactions. You can change this, but we don’t recommend it. This account temporarily holds payments—typically cash and checks—that haven’t yet been deposited into your bank. 

It’s a good idea to review this account regularly to ensure you’re not leaving funds languishing. Hover your mouse over the Transactions link in the toolbar and click Chart of Accounts. Scroll down until you find it, as pictured above. To combine the transactions in the Undeposited Funds account to make a bank deposit, click +New in the upper left corner and then click Bank deposit under Other. Make sure the Account in the upper left corner is set to the account where you want to deposit the funds. Click the box in front of each check you want to deposit (or Select all), then Save.

To see your deposit information, click Reports in the toolbar, then  click Deposit Detail under Sales and Customers. You’ll have to list the deposits individually on your physical deposit slip. Make sure that the slip matches what you see in QuickBooks Online. 

If you need help or have questions, feel free to contact us to schedule a consultation. While the process of receiving payments isn’t overly complicated, it’s essential to ensure every payment is recorded accurately and deposited correctly into your bank accounts.