17October

4 Simple Financial Controls that Could Save Your Business from Major Hardships

When it comes to managing online risks, there are plenty of technical solutions an IT provider can implement to save your business from catastrophes.

However, one of the greatest risks to your business comes from internal financial controls – or the lack thereof.

 

In today’s digital environment, many of our financial transactions occur online. Although some software-based controls and automation can help, there is no single program or software to guarantee safe online financial activities. That’s why financial controls require a more comprehensive solution that looks at your business as a whole.

 

Financial controls protect a company’s finances from errors, fraudulent transactions, and inaccurate reporting. In short, they protect your resources and assets. There are four simple steps for creating financial controls in your business:

 

Risk Assessments

 

A risk assessment walks you through the five w’s: who, what, when, where, and why. Once you’ve answered these questions, you’ll better understand where any potential gaps exist. At this stage, you aren’t solving the problems, but simply pointing them out.

 

Two of the most important questions to ask in this stage are “who?” and “why?” Human error can be devastating when it comes to the transfer of funds through online services. A simple slip-up can result in incorrect amounts of funds being transferred, or funds going to the wrong accounts. This can easily cost a company thousands of dollars. Having more than one person involved in every stage of the process can ensure there are appropriate checks happening at every stage.

 

Processes & Environmental Control

 

One of the top ways to prevent errors from occurring is through laying out a simple set of processes for your team to follow when sending or receiving funds online, compiling reports, or any other activity tied to financial monitoring. People approach tasks in different ways, which is one of the main reasons human error sometimes slips into your financial dealings. Laying out a specific set of processes with multiple check points at each stage can help you protect your finances.

 

Training

 

While process is important, putting a series of checkboxes on paper doesn’t go far enough. If the people using the processes and systems don’t understand how to follow them (or why they’re important), your processes could easily break down.

 

The human component of IT solutions is delivered through training. A strong IT service provider focuses on where your technical and human resources overlap. These are the areas where errors are most prone to occurring. A strong training and testing program can help employees and management conduct their own risk assessment to grasp the “why” behind the processes, and then walk through the process to begin to understand the “how”.

 

Communication & Monitoring

 

As with any business system, ongoing communication and monitoring provide the opportunity for regular follow-ups and formal check-ins. Opening up feedback channels with your staff provides the opportunity for them to point out additional gaps in the process, ask questions, and explore opportunities for improvement.

 

If you have questions about how to implement financial controls or training systems in your business, please reach out to the Alt-Tech team. We’re happy to answer any questions you have about financial solutions. One of our main goals is to provide simplicity in your business solutions.

 

 

 

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