Small Company? How to Improve Internal Financial Controls

Internal financial controls are important for every company, to help the organization avoid problems related to fraud and errors. In larger companies, the way to avoid these problems is by management oversight and segregating out the duties, which reduces the likelihood of financial oversights. But, with a small company it might be a little more difficult, especially if you have a small staff.

Even though you don’t have a lot of employees, it is still important that you have checks and balances in place to keep your company protected. Here are a few ideas that you might consider:

Don’t Use Cash

Cash makes it easier for people to steal from the company, so limiting the amount of cash will reduce the risk of fraud. Stick with digital and check payments. If you need to have cash available to run the business, make sure that there are two employees involved in the process when the cash is received and counted.

Outline Responsibilities

In small companies, it is common for people to be wearing multiple hats as the team is juggling the work that comes in. As a result, sometimes things fall through the cracks because people assume that someone else is taking care of the duties. Make sure that the financial responsibilities are clearly outlined and written down, and make a point to review these procedures on a regular basis to ensure that people are keeping up with their responsibilities.

Monitor Credit Card Statements

When employees have credit cards that have been issued by the company, you need to make sure that a system is in place to review the card transactions. Sometimes, transactions might be put on the card that aren’t business-related costs. Reviewing the statements every month will ensure that employees are staying honest with the use of their credit cards.

Hire a Bookkeeper

Having a bookkeeper available to check transactions and stay up-to-date with the finances of your company is very beneficial. An experienced small business bookkeeper will offer an unbiased point of view for your company finances. Additionally, these bookkeeping services add another checkpoint into the system, to make it easier to identify fraudulent activities that might be occurring.

There are many other reasons why your company can benefit from the services of a bookkeeping company, and Easier Bookkeeping is here to help! We invite you to contact our office anytime to learn more about the ways we can assist with protecting the financial interests of your company. Call us today at: (888) 620-0770

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