Welcome to the first issue of MutualBank's Business Internet Banking update "Doing Business" - a quarterly communication - where we will keep you informed of trends, protection from fraudulent-related activities and educated about upcoming opportunities.

Fraud protection has never been more critical to an organization as economic uncertainty - together with the emergence of new technologies - has increased the likelihood that organizations will be faced with attempted fraud. According to the AFP, more than 70 percent of organizations polled experienced attempted or actual payments fraud in 2008. One of the largest growing segments of fraud is Phishing.

Phishing is often described as "e-mail or social engineering fraud." It is a type of cyberfraud that allows for fraudsters to deceive targets into providing sensitive information and security credentials through look-alike e-mails and websites from known entities, such as banks and e-commerce sites, or from malware, which is malicious software that is actually downloaded to a computer and goes unnoticed by the user.

According to Gartner, Inc., a global IT consultant, more than five million U.S. consumers lost money to phishers in their most recent phishing study. This number represented an alarming increase of nearly 40 percent over the prior year's study.

We at MutualBank are concerned with your financial security and want to ensure that we are providing quality and relevant education to help our clients live a better life.

• Ensure your browser and security software information is updated. Antivirus software, firewall protection and software patches from your operating system provider can help prevent criminals from monitoring your online activities.
• Install spam-blocking filters and maintain companywide surfing block controls; utilize privacy locks to restrict access to sensitive data; make sure employees log out or lock their computers any time they step away from their computers.
• Be suspicious of any email with urgent requests for financial information and avoid filling out forms in email messages that ask for personal financial information.
• Don't use the links in an email, instant message, or chat to get to any web page if you suspect the message might not be authentic or you don't know the sender.
• Always ensure that you're using a secure website when submitting credit card or other sensitive information via your Web browser.
• Regularly log into your online accounts.
• Regularly check your bank, credit and debit card statements to ensure that all transactions are legitimate if anything is suspicious or you don't recognize the transaction, contact your bank and all card issuers.

Apfel, Ira (2009). 11 Anti Phishing Tips. RISK! December 2009. 3.

A change to making tax deposits is coming in 2011. Do you currently use Federal Tax Deposit coupons to make tax deposits? If so, those will need to be made electronically, beginning in 2011, as announced by the U.S. Department of Treasury. Businesses with tax deposits of$2,500 or less per quarter maymake a payment with their quarterlyForm 941 and will not have to use the electronic option.

• This means that effective January 1, 2011, MutualBank will no longer accept TT&L coupons. If you currently make tax payments with a coupon, register at www.eftps.gov. (open in new window)
• Form 941 is not the same as the TT&L Coupon which is Form 8109.Again, if tax payments are less than $2,500, you may make payments with a Form 941 or you may make payments electronically.
• Tax payments will not be accepted at the bank. They must be made electronically or paid quarterly when tax Form 941 is files. MutualBank will no longer accept any tax payments after December 31, 2010, based upon the Treasury's guidance.
  
  

With most small businesses, cash is king. By that we mean that one of your most important tasks is managing your cash flow to ensure there are funds available for meeting your operating needs and funds available to enable you to take advantage of opportunities for growth.

Optimizing your operating cash flow really boils down to three basic rules: Click to view.

1. Get money you are due as fast as possible.
2. Pay money you owe as late as possible.
3. Earn as much as you can on your cash balances.

Unless you are in a retail business, most receipts for sales or services performed take place some time after the sale actually occurs. A sale is made, goods are shipped or services are performed, an invoice is presented and you wait for payment. Here are three ideas for accelerating when you receive payment.

1. Identify a billable event, other than delivery. It is common to have partial billings on large jobs or when the job will take some protracted period of time. Consider using some event or milestone as a trigger for an invoice. It could be passing a design review, completing a critical test, or receiving a large amount of material. If negotiated into the sale, these events could authorize you to issue an invoice before the job is totally completed.
2. Set payment dates. Your customers are trying to optimize their cash flow the same as you. In the sales process, and certainly on the invoice, state when payment is due. Whether it is the common "30 days" or with a "1% discount for payment within 10 days", customers will be more likely to respond to specified dates and terms. Sales to poor credits should be COD. Once the payment date is established in your contract, you have a legally enforceable document.
3. Establish late payment penalties. As Oscar Wilde said, "Nothing focuses the mind like the sight of the gallows." Customers respond and your chances of collecting interest from delinquent accounts improve with a stated policy.

Holding onto your money as long as possible also improves your operating cash flow and enables you to earn interest on your funds.

1. With major suppliers it may be possible to negotiate a more flexible payment schedule. They want your business and are often willing to respond with payment terms, especially if the materials you are buying are being used over an extended period. The time to approach the supplier is when placing the order. They are more willing to consider this before they have your order in hand.
2. A second issue to consider when you are the customer is some form of discount for prompt payment. While the practice has become less common, some organizations still offer a 1% or 2% discount if their invoices are paid within a shorter period. A 1% discount for payment within 10 days equates to a 36% annualized return on your money. If your cash flow allows it, taking advantage of prompt payment discounts may be the best return on your investment.

Finally, you should make sure you are earning as much as you can on your excess cash balances.

1. While certain banking laws may restrict paying interest on commercial accounts, you should at least check with several banks to learn their policies.
2. Our bank offers "sweep" arrangements that automatically transfers more amounts in excess of some minimum into an interest bearing account. As your MutualBanker for more information!

Cash and time are two of your most precious resources. Spending some time setting accounts receivable policies, negotiating payment schedules with vendors and finding the right account(s) for your cash will help you maximize both.