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You’ve worked hard to reach the pinnacle of your field. As an independent business owner, savvy individual or industry executive, you’ve earned your place in the world. Now you want to protect what you have, while sowing the seeds of growth. The lifestyle you enjoy today is the result of:
• Maintaining your vision
• Working towards a goal
• Having the discipline to stick to your plan
Your peace of mind comes from knowing your resources are secure. It’s through a wide range of practical protections including internal controls for your cash, internal controls accounting and audit certification — that you’re able to completely embrace the lifestyle that you deserve.
BRING IN THE BARRIERS
No business is too small to institute a variety of internal controls. Many entrepreneurs believe that they don’t have the kind of exposure that big businesses have, so they don’t take the precautions required to prevent unnecessary losses.
Instead, with audit controls in place, your Edofalltrades tax accountants can catch mistakes and outright fraudulent maneuvers — if not before, then very shortly after, they occur. Some of the places where you might find yourself vulnerable to fraud, mishaps or oversights include:
• Account payables in which you may be overcharged by vendors or where untrustworthy employees can create false invoices
• Check signing privileges to staff or contractors who don’t closely watch the payment schedules
• Employees or contractors not fulfilling their agreements
• Disbursements that aren’t closely monitored
• Managing Cash Flow that leaves wiggle room for embezzlement
• Collections that just write off bad debts inappropriately
• Workers’ compensation fraud
• Accounting for Payroll that doesn’t accurately portray the real work being done
INTERNAL CONTROLS FOR CASH
Collecting and disbursing cash is by far the one area that holds the greatest risk for fraud. Mistakes that continue to occur without inspection can lead to dramatic losses in both your business accounts and your personal wealth. You can take steps to prevent it.
When you hire us, you receive lists of recommendations for internal controls that are uniquely suited to your particular business and personal needs. For example, we would suggest a change to how you count the money in your cash registers if you own a string of franchises across the greater New York metropolitan area. Instead of you counting it every day, designate two people to do it and a third person to make the bank deposits.
Other common internal controls for keeping your cash flow straight and your staff members honest include:
• Requiring two signatures on checks
• Allowing surprise audits
• Inspecting inventory on an irregular basis
• Setting up procedures for anonymous whistleblowing
• Requiring documentation trails
• Running background checks
• Limiting access to accounting books
• Bringing in a third-party for audited financial statements
• Appraising key assets and resources occasionally
• Setting up computer controls
In addition, your policies and procedures should state, in no uncertain terms, that you have zero tolerance for dishonesty from those people and businesses you do business with. Key controls give you and your employees transparency. When your team follows consistent patterns of documentation and accountability, you facilitate the success of your business.
No matter what size of enterprise you run, the internal controls you set up with your personal accountant will save you money in both the short term and the long run. It’s never too early to do a surprise internal control audit, but it can be too late.
SETTING THE BAR
Internal controls are created to protect your interests and when you monitor your results, that’s when you’ll feel the weight of worry lift. Set the bar high so that employees, vendors and contractors know what to expect. Demand to see your financial audits on a regular basis. In fact, we ensure that these are made available at your convenience.
When you begin your relationship with us, we discuss the internal controls you’d like to see in place. Take the suggestions we supply and work to implement them right away. Internal controls set in place after you experience fraud may prevent future losses, but they don’t help you much today.
You may not be able to protect your assets and resources from every conceivable threat, but with the right types of internal controls in place, you reduce your risks considerably. Maintain a serious attitude about keeping up with the required documentation from everyone with whom you do business. When they understand the veracity of your convictions to protect your resources, you add another layer of credibility to those controls.
While it may be tempting to turn away from constant vigilance for your company and its assets, it’s vital that you keep your finger on the pulse of the source of your prosperity. Through regular reports from your internal and contract accountants, you always know where you stand. Make the development and implementation of the necessary internal controls part of your strategic financial planning processes. Proper, sustained oversight ensures you success now and in the future.
Through the use of internal controls for cash and audit controls, you not only improve your odds of preventing fraud, reducing your risks, but you also create a path to smoother financial tracks in all your business and personal financial dealings. Your tax planning and tax preparation will go smoother. You’ll always be prepared for an IRS audit and other governmental or required regulatory inspections of your books.
Due diligence consulting nearly always includes the review and recommendations for developing internal controls suited to your needs. With your small business bookkeeping in order — and the proper controls in place to serve as the watchdog — your wealth is assured.