
Benjamin
๐๐ถ๐ป. ๐๐ผ๐ป๐๐ฟ๐ผ๐น๐ ๐๐๐ฒ๐ฟ๐ ๐๐ถ๐๐ฎ๐๐๐ฒ๐ฟ
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?
๐๐ฑ๐ต๐ช๐ฎ๐ช๐ป๐ฆ the right approach to growing the business efficiently.
๐๐ถ๐ฏ๐ธ๐ข๐บ to ensure cashflow lasts as long as expected.
๐๐ณ๐ฆ๐ฑ๐ข๐ณ๐ฆ for investors and lenders asking what systems are in place.
๐๐ณ๐ฆ๐ท๐ฆ๐ฏ๐ต the risk of a serious incident unraveling your hard work.
๐๐ผ๐ ๐๐ผ ๐๐ป๐๐๐ฎ๐น๐น ๐๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ฎ๐น ๐๐ผ๐ป๐๐ฟ๐ผ๐น๐
Early choices around financial controls set the stage as you grow.
๐๐ฆ๐ฑ๐ข๐ณ๐ข๐ต๐ฆ ๐๐ฆ๐ด๐ฑ๐ฐ๐ฏ๐ด๐ช๐ฃ๐ช๐ญ๐ช๐ต๐ช๐ฆ๐ด โ More than one person should be involved with each of these transactions: expenses, checks, invoicing, payroll, inventory, and financial reports.
๐๐น๐ฑ๐ฆ๐ฏ๐ด๐ฆ ๐๐ฐ๐ญ๐ช๐ค๐ช๐ฆ๐ด โ Clarify expectations. Start with a โuse your best judgementโ attitude and then go deeper to define and communicate details (e.g. โAny purchase over $xx needs manager approvalโ).
๐๐บ๐ฃ๐ฆ๐ณ๐ด๐ฆ๐ค๐ถ๐ณ๐ช๐ต๐บ โ Set up multi-factor authentication and ask accounts for alerts in case of unwanted activity. Consider an audit or training.
๐๐ฆ๐ฑ๐ฐ๐ณ๐ต๐ช๐ฏ๐จ โ Review statements and reports. Force yourself to understand large costs and significant variance from prior periods.
๐๐ถ๐ฅ๐ช๐ต๐ช๐ฏ๐จ 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.
๐๐ถ๐ป๐ฎ๐น ๐ง๐ต๐ผ๐๐ด๐ต๐๐
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. Donโt 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