What are they, how to get them, plus how to get past the yucky boss stuff and implement them
Internal Controls. That is a term that sounds scary. It sounds like a lot of work. It sounds like you have to put more on your plate. It sounds, frankly, very “Accountant-y”, which can be stuffy and boring to some people.
I’m here to dispel these worries for you. Internal controls is just another way of handling your business. You lock your car doors, you set a password for your email, and you should track your cash. After all, it’s yours to control. Why let someone do it for you?
Here are a few easy and effective ways to monitor your business and money.
#1 Petty Cash
Do you have a lockbox of cash in your office? This is an easy way for your funds to grow legs and walk away if you’re not paying attention. Keep a cash log to sign in/out any funds, and require receipts and exact change be placed back in the box. There are some worrisome signs you should look for. If it runs out of cash without explanation, needs to be replenished often, and there are no receipts or change being put back in the box, you might have a petty cash issue. It’s best to head this issue of at the pass before it becomes a bigger issue overall.
#2 Inventory Tracking
Do you have desirable tools or inventory at your business? If so, these might go “missing” if you’re not watching carefully. If dishonest people (who may work for you or not) think you’re not tracking your physical inventory or office supplies, they will assume you won’t notice if things go missing. Simple ways to avoid this are as follows. Lock your cabinets, be transparent and obvious about counting inventory, and hold staff accountable to do the same. Watch out for tools and equipment walking off the job site as well, someone walking by might want to help themselves if no one is paying attention.
#3 Split up your money tracking processes
If you have one person handling all the money, you should lighten their load. Deposits, bill payments, logging Quickbooks, and reconciling the bank statements should have more than one person involved. If you don’t, you could find yourself in a situation where someone could cover up bad behavior. If you can’t split these duties between two or more people, insert yourself into as many of these steps as you can. You can do this by reviewing, authorizing, and spot checking all of the steps in the cash cycle.
#4 Monitor and check the cash in the register
It’s easy to slide money out of the till if you don’t put in measures to stop it. Ringing up every sale, having the till operators count their till cash when they clock out, and having manager approval over refunds are all great ways to monitor your register.
#5 Sign the checks yourself
If you have office help, they may be paying your bills. Ensuring you authorized all bills by signing the checks yourself is a two birds, one stone process. You get to verify your vendor charged you the correct amount, and you get to make sure that check is going where it is supposed to.
#6 Approve the payroll
Check the hours being paid, the bonuses funded, and ensure the tax payments were actually sent to the government.
#7 Run background checks on your employees and yourself
It is a good idea to find out who your potential employees are. Background checks are quick and easy. Call references, and make sure they have been upfront about any criminal history. Honesty here is the best policy. While you are at it, run credit checks on yourself and your business. These days, identity theft is rampant. Looking at your credit report will tell you if any new credit cards or bank accounts have been opened in your name or under your business name. If someone wants to funnel your money to themselves, this is one way they can do that.