You work hard to build your business. Take the time to protect your investment. When we have discovered, or uncovered, cases of fraud, embezzlement, or inaccurate reporting, it is often a surprise to the owner. Fraud prevention, embezzlement detection, and accurate financials are all reasons to implement and follow sound internal control practices. It is the age-old adage of “an ounce of prevention….”
The most susceptible areas of risk for small businesses revolve around cash, receipts, and disbursements.
Here are a few simple routine procedures that will help:
Managers and owners should make a commitment to implement internal controls and follow those controls. Know where the risks are for your particular industry. Create a culture in your workplace that results in accurate and timely financial information.
Certified Public Accountants are dedicated to providing sound accounting advice. Contact your accounting firm if you would like help assessing the risks for your particular business.
The IRS and the FASB (Financial Accounting Standards Board) require non-profit corporations to present an analysis of their expenses – by function. That is, how is your organization using its resources? How much of your expenses are spent on “Management” versus “Program?” How much of your resources are used for “Fundraising” rather than “Program?” This type of analysis is required and useful for donors and lenders, but it is also a valuable tool for management.
Financial statements provide a picture, a snapshot, of the state of your organization at one point in time – generally your fiscal year end – and how well you managed your funds over that fiscal year.
From a business perspective, an audit can be seen as disruptive to the day-to-day operations. The delay in operations caused by an audit can be compounded if you’re not ready for your auditor.