Trust is such an important aspect of every part of our lives. We cannot reach our full potential without someone trusting in us and trusting others. However, trust is earned and proven time and again. Would you trust your baby boy to someone you didn’t really know well? Of course not! So why do we trust our business, our resources, our finances, the baby of our blood, sweat and tears, to staff, consultants and suppliers that we don’t know very well?
When you first started out, there were 3 people in your business – me, myself and I. You opened up and locked up, you made all the payments, and you didn’t have petty cash. But as your business has grown, you’ve involved more people in your dream. You’ve put processes in place to ensure the quality of the product or service being delivered, and to ensure the performance of your staff and suppliers. What processes have you put in place to protect your assets and resources?
The following are some things that you may have done, or should do:
– Insurance for computers, equipment, personal income protection and medical
– Log books for vehicle usage to prevent personal use
– Lock away and issue out keys for computer and electronic equipment, supplies, and the office
– Lock away petty cash and give the key to only one person
For all the resources (equipment, cash, access to bank accounts) there should be written authorization that the person is allowed to use the resource. Then if something happens, it is clear who had the keys last and who was responsible.
So often there is the sad story of when the trusted bookkeeper left and a new person started. The new person stole a large sum of money and covered it up in the books. Just because one person is trust-worthy doesn’t mean everyone is. The process of checks should be in place regardless of who does the job. It protects the employee (and the other staff) from undeserved suspicion or blame.
Another reason for checks and procedures is to make sure that the financial information that you are relying on to make decisions is accurate and complete. Some ideas include:
– Written authorization for all payments
– Sequential numbering of documents to easily see if anything is missing
– Supporting documentation that provides evidence of the transaction
– Reviewed bank reconciliations
If you are concerned that you may not be able to rely on your procedures, please contact us to conduct a review of what you are currently doing and provide you with recommendations and changes to help protect your future business.