The survival of one’s business is not just about capitalization, funding, or looking for more investors but also strengthening your internal control. Internal control plays a vital role in a business. This is where you impose rules, procedures, mechanics, detect frauds, and anything that might help strengthen your business internally.
If a business has poor internal control, it will invite fraud activities resulting in incorrect financial reporting, and the company’s objective won’t be achieved. Hence, the business won’t expand and won’t survive. To help you strengthen your internal control, here are the proven ways that you should know about and try.
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Invest in Label Printers
One of the best ways to strengthen your internal control is to invest in Label Printers. PC Label printers can be a great investment because of how they print every transaction confirmed in a detailed manner with a high resolution. Furthermore, this is also the part where they come in handy, along with the information printed is the item’s code which is very important.
The item code is like your tracking number on the item sold. Those hard copies of sold items from the printer should be compared manually with the soft copies recorded on the computer as part of your inventory counting. Remember that inventory is the backbone of your business. With that said, an effective inventory system can be attained using Label printers.
Segregation of Duties
In this section, the famous line applies that everyone’s a genius. However, if you judge a fish by its ability to climb a tree, the fish will live a naive and unproductive life. Same in business, if you have a restaurant, you can’t assign your waiter to accounting duties. Instead, you hire another staff member who solely does accounting duties.
Furthermore, in segregation of duties, it will all start in proper staffing. It will always be a good idea to hire people with sufficient skill and experience in the field. But don’t overlook the fact that there are newly registered or newly graduated people that are already competitive and gifted in skills. It would still be best to be conservative and have an open mind when it comes to hiring new employees.
Impose Effective Policies
Imposing effective policies should always be applicable to everyone. The term policies include clear communication with the employees regarding their day-to-day tasks. When you have an effective policy, there is a high chance that your business will grow because there is less guessing on what to do in uncommon situations and solutions for customer’s concerns are always clear and understandable. It’s all in your policies.
In addition, when it comes to acquiring new assets or approving a budget, it would be best that you and not other representatives will approve the proposal. In this way, you can see all the transactions that involve cash before they’ll go out of your account. Plus, this will also help reduce the risk of theft because you already anticipate future disbursement.
Communicate Effectively
In communicating effectively, this generally means that at least once a week, you need to talk to your employees one by one or have a general meeting twice a month. It’s always a good idea to give your employees an ample opportunity to be heard. In addition, this will help your business internally to identify problems within your business or employees by asking them what to improve and what to avoid.
Having post-shift or pre-shift huddles would also make a great idea. But this meeting is not just about what to improve and what the problems are. You can also include your objective for the week, like how much money you are targeting to collect. Lastly, never forget to always include your plans for your employees in the meeting, like giving them incentives if they hit this certain PR or paid vacation leave, and anything that will motivate them to work hard.
Seek Third Party’s Opinion
If you are a business owner, you should oversee your entire business, including checking your business’s financial flow. Although bookkeepers are usually the ones to create and report the financial statements, there will be times that you will notice there is something wrong with the financial report or some reports are inaccurate.
In this situation, seeking a third party’s audited opinion would be your best option. Third-party accountants will help you understand your financial statements and inform you of the inaccuracies if there are any. However, don’t let your bookkeeper know. So you will need to require them to take a vacation leave when this happens.
Put Some Boundaries
Putting some boundaries between you and your employees would help strengthen your internal control. Outside the workplace, you may be friends. But inside the workplace, there should be boundaries. The reason is that some of your closest employees might work less and become unproductive because they are not afraid of you. On the other hand, employees that are not close to you might get jealous of your relationship with other employees.
Takeaway
There are so many strategies for a business to survive. However, there are much more risks that a business won’t survive. With that said, to ensure your business will be on the right path, start with strengthening your internal control with the ideas mentioned above. But above all, it will always be you and your decision-making as the owner that will lead your team to success.
About Carson Derrow
