𝗙𝗶𝗻. 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝘀 𝗔𝘃𝗲𝗿𝘁 𝗗𝗶𝘀𝗮𝘀𝘁𝗲𝗿

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?

𝘖𝘱𝘵𝘪𝘮𝘪𝘻𝘦 the right approach to growing the business efficiently.

𝘙𝘶𝘯𝘸𝘢𝘺 to ensure cashflow lasts as long as expected.

𝘗𝘳𝘦𝘱𝘢𝘳𝘦 for investors and lenders asking what systems are in place.

𝘗𝘳𝘦𝘷𝘦𝘯𝘵 the risk of a serious incident unraveling your hard work.

𝗛𝗼𝘄 𝘁𝗼 𝗜𝗻𝘀𝘁𝗮𝗹𝗹 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝘀

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

𝘚𝘦𝘱𝘢𝘳𝘢𝘵𝘦 𝘙𝘦𝘴𝘱𝘰𝘯𝘴𝘪𝘣𝘪𝘭𝘪𝘵𝘪𝘦𝘴 – More than one person should be involved with each of these transactions: expenses, checks, invoicing, payroll, inventory, and financial reports.

𝘌𝘹𝘱𝘦𝘯𝘴𝘦 𝘗𝘰𝘭𝘪𝘤𝘪𝘦𝘴 – Clarify expectations. Start with a “use your best judgement” attitude and then go deeper to define and communicate details (e.g. “Any purchase over $xx needs manager approval”).

𝘊𝘺𝘣𝘦𝘳𝘴𝘦𝘤𝘶𝘳𝘪𝘵𝘺 – Set up multi-factor authentication and ask accounts for alerts in case of unwanted activity. Consider an audit or training.

𝘙𝘦𝘱𝘰𝘳𝘵𝘪𝘯𝘨 – Review statements and reports. Force yourself to understand large costs and significant variance from prior periods.

𝘈𝘶𝘥𝘪𝘵𝘪𝘯𝘨 – 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.

𝗙𝗶𝗻𝗮𝗹 𝗧𝗵𝗼𝘂𝗴𝗵𝘁𝘀

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. Don’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.

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