Small Businesses, You Need These Financial Controls

Most small business owners aren't aware there are financial controls they should be putting in place, but if they operate a business without them, they may be vulnerable to a number of risks, including fraud and lost profits. To ensure that no problems are overlooked, small business owners need to learn to think from an auditor's POV. They need to rely on the kinds of tests an auditor would implement and have their business manager perform those tests. Here are some of the key risk areas to keep in mind.

Cash

Cash is always a risky area. In many cases, small business owners don't regularly do a bank reconciliation, a simple procedure that should be done every month. They often make the mistake of waiting until the end of the year to complete this step. Companies should also make sure that all petty cash is reconciled — detailed receipts should be attached to account for any cash used - as it is cash on hand that is most likely to disappear.