Fraud can hit small businesses hard, especially when there's a lack of oversight. Internal controls are essential in preventing financial mismanagement and building trust in your operations.
🛡️ Here is a list of suggested Internal Controls to Implement:
🧾 Separation of Duties: Ensure that no one person handles every step of a financial transaction—split responsibilities among team members. Check and check again.
🔑 Access Controls: Limit access to sensitive data and systems based on role. Use software that supports custom settings and user permissions.
🧮 Regular Reconciliations: Frequently reconcile bank statements and financial records to catch discrepancies early.
🧍 Approval Processes: Require managerial approval for significant expenses or changes to payroll.
📚 Document Everything: Keep clear records of all financial activities and who is responsible for them.
🔍 Proactive Fraud Detection: By monitoring accounts for unusual activity and setting up alerts for large or suspicious transactions, you have an opportunity to detect fraud promptly and efficiently.
Consider scheduling periodic audits—internal or third-party—to verify that your internal controls and systems are working and being staff are demonstrating compliance.
