- September 22, 2018
- Posted by: Midridge International
- Category: Blog, SME
When your designing your business structures, you want to make sure you’re hoping for the best from your employees, managers and business partners – but planning for the worst.
That way you can protect your cash, assets, and overall business and keep operations running smoothly.
So what role should checks and balances play within your organization?
Think of them as a series of simple security measures meant to shield you against fraud and other forms of financial malfeasance.
Add A Background Check
Now, here’s the first step you should make. Each member of your staff is going to play a crucial role regarding the development of your business, which is why extra attention needs to be paid to the hiring process.
Make sure you issue a background check for every job applicant. A potential candidate for a position might have a fantastic resume but could reveal another side of their personality when they get the job.
Try to know learn everything about someone before you welcome him or her to your business. A background check could nip a problem in the bud before it officially begins.
Manage Your Staff – Roles and Expectations
The next step should involve creating a motivating work-environment. Your staff need to feel connected to your business. If you provide staff with motivation to succeed and a sense of ‘ownership’ of your enterprise, you’ll find you need to spend a lot less time worrying about cash-theft or inventory leakage.
Equally, it doesn’t pay to be naive about the potential for staff-theft. There are however some simple controls you can put in place to help with this. Choosing a point of sale system that has tiered access so only managers can carry out refunds will reduce the chance of sticky-fingered staff. You will also want to think about where you keep supplies and who has access to which areas of your storage and office space.
Split Up Financial Responsibilities
The most important check and balance in your business is how you manage your finances. It is vital that you separate the person/people handling cash on a day-to-day basis from the person doing your books.
If you have a manager running your store, it is common and sensible practice to not allow this manager unfettered access to your books. Instead, have the books reconciled by an off-site bookkeeper. If you have one person counting the cash at the end of the night and someone else totally the official cash-in, cash-out, you’ll very quickly be able to identify discrepancies.
Be meticulous with inventory. Again, you’ll want to split up the people dealing with your suppliers on a financial level and the people actually receiving stock and taking physical count each day/week.
Inventory leakage can be a huge drain on your business, so it’s also a good idea to carry out periodic spot-checks on inventory levels yourself.
The key with systems that control inventory and cash in your business is that you adopt the attitude of the founding fathers – we hope and believe that people are worthy of our trust but at the same time, we put in place measures to reduce our need to rely on trust alone.