ย 
Search
  • Benjamin

๐—™๐—ถ๐—ป. ๐—–๐—ผ๐—ป๐˜๐—ฟ๐—ผ๐—น๐˜€ ๐—”๐˜ƒ๐—ฒ๐—ฟ๐˜ ๐——๐—ถ๐˜€๐—ฎ๐˜€๐˜๐—ฒ๐—ฟ

Updated: Oct 15, 2021



When it comes to starting a business, make every resource count.


Financial controls prevent and catch mistakes, errors, and fraudulent activity from outsiders, employees, and even co-founders.


Why scrutinize finances?


๐˜–๐˜ฑ๐˜ต๐˜ช๐˜ฎ๐˜ช๐˜ป๐˜ฆ the right approach to growing the business efficiently.


๐˜™๐˜ถ๐˜ฏ๐˜ธ๐˜ข๐˜บ to ensure cashflow lasts as long as expected.


๐˜—๐˜ณ๐˜ฆ๐˜ฑ๐˜ข๐˜ณ๐˜ฆ for investors and lenders asking what systems are in place.


๐˜—๐˜ณ๐˜ฆ๐˜ท๐˜ฆ๐˜ฏ๐˜ต the risk of a serious incident unraveling your hard work.



๐—›๐—ผ๐˜„ ๐˜๐—ผ ๐—œ๐—ป๐˜€๐˜๐—ฎ๐—น๐—น ๐—™๐—ถ๐—ป๐—ฎ๐—ป๐—ฐ๐—ถ๐—ฎ๐—น ๐—–๐—ผ๐—ป๐˜๐—ฟ๐—ผ๐—น๐˜€


Early choices around financial controls set the stage as you grow.


๐˜š๐˜ฆ๐˜ฑ๐˜ข๐˜ณ๐˜ข๐˜ต๐˜ฆ ๐˜™๐˜ฆ๐˜ด๐˜ฑ๐˜ฐ๐˜ฏ๐˜ด๐˜ช๐˜ฃ๐˜ช๐˜ญ๐˜ช๐˜ต๐˜ช๐˜ฆ๐˜ด โ€“ More than one person should be involved with each of these transactions: expenses, checks, invoicing, payroll, inventory, and financial reports.


๐˜Œ๐˜น๐˜ฑ๐˜ฆ๐˜ฏ๐˜ด๐˜ฆ ๐˜—๐˜ฐ๐˜ญ๐˜ช๐˜ค๐˜ช๐˜ฆ๐˜ด โ€“ Clarify expectations. Start with a โ€œuse your best judgementโ€ attitude and then go deeper to define and communicate details (e.g. โ€œAny purchase over $xx needs manager approvalโ€).


๐˜Š๐˜บ๐˜ฃ๐˜ฆ๐˜ณ๐˜ด๐˜ฆ๐˜ค๐˜ถ๐˜ณ๐˜ช๐˜ต๐˜บ โ€“ Set up multi-factor authentication and ask accounts for alerts in case of unwanted activity. Consider an audit or training.


๐˜™๐˜ฆ๐˜ฑ๐˜ฐ๐˜ณ๐˜ต๐˜ช๐˜ฏ๐˜จ โ€“ Review statements and reports. Force yourself to understand large costs and significant variance from prior periods.


๐˜ˆ๐˜ถ๐˜ฅ๐˜ช๐˜ต๐˜ช๐˜ฏ๐˜จ โ€“ Scrutinize a limited number of items regularly. For instance, every quarter randomly select 10 sizable invoices and validate the amounts. Do the same with a few client contracts.



๐—™๐—ถ๐—ป๐—ฎ๐—น ๐—ง๐—ต๐—ผ๐˜‚๐—ด๐—ต๐˜๐˜€


While financial controls may not be your priority, a few steps can easily save money and potentially prevent a devastating event.

Since you may not know all the risks, seek advice from investors, banks, and law firms. on how to install the right systems.


The key is to get started. Donโ€™t stress over the perfect solution, just build some process now and keep improving your practices.


The scrutiny of financial controls will help you discover any irregularities and hopefully prevent a tragedy.


-----------------------------


The photo is by Anna Nekrashevich who can be found here: https://bit.ly/2ZVxkRD

120 views0 comments
ย