Internal ControlsWhat are Financial Controls? Financial Controls are the policies/procedures, controls, resources, training and systems that manage your business finance. Every business should have some level of control in place and they should be fit for purpose to do the job effectively and efficiently with the right systems, staff and security/authority measures in place to protect and grow your business. How robust financial controls can benefit your business Internal financial controls are of the utmost importance to your ability to run your business. Their primary role is to protect your financial and management information from accidental or deliberate misuse. As an analogy, a business without financial controls is like a house with no locks on the doors, it might not cause you a problem for a while but it will eventually and it’s case of when, not if. As well as protecting your money and data, controls also allow a business to be compliant with laws and HMRC regulations. They establish a process of how you manage your finances, who does what and how financial data is created and stored. They allow your business to function smoothly, without financial chaos and all the stress for directors which that entails. We engaged Denise to oversee our own staff in moving our accounts to SAGE. She did this with flying colours, and indeed trained our staff to such a level that we are now running very smoothly. Roy Goff, Capital Living London Download our E-BookDownload our useful E-Book “Accounting Guidance for Small Businesses” to get Denise’s top tips on credit control, sales invoicing and when to outsource. Download Don’t assume this is someone else’s responsibility Company directors who don’t have a background in finance often want to make financial controls someone else’s problem. If that someone is an employee of the business, that should be a serious concern. What’s to stop that person making mistakes unnoticed that cost you a significant sum? Or even worse, committing a deliberate fraud or theft from the business? If you allowed them to create the rules and design their own access without your knowledge then you are completely vulnerable. It’s the equivalent of handing out keys to your house to anyone who visits. The key elements as a business owner you should have in place are: Authorisation controls for fraud prevention Segregation of duties so that no employee controls both accounts receivable and accounts payable Software systems that store and process data securely and enable reporting and transparency Human Controls – To ensure staff training and director oversight are happening The list of serious problems that a company can face, if it has no financial controls, are so scary that it seems amazing that anyone could ignore them. But it’s human nature to sometimes obsess over small everyday problems whilst sticking our heads in the sand over occasional but potentially far more serious ones. If you recognise any of these issues in your business and you need extra support please contact Denise for a free consultation on how she can support you and your business.