How to protect your business with accounting internal control system
The market value of any company is based on the expectations of its future earnings. This primarily depends on accounting reports. The more reliable accounting information to the investors and other interested parties, the higher will be the expected returns and vice versa. Applying these simple things can help your business to meet the needs well and eliminate any uncertainty easily.
Step 1: Appoint an accountant
The first need to stay ahead in fulfilling any financial business need is to appoint a qualified accountant. You can get it through,
1. Identify the accountant who meets your business needs
You have to check the ability of the concerned accountant whosoever you are willing to appoint for your business organization. For this, you have to be clear on your requirements, i.e., whether you want an accountant or CFO.
· An accountant is responsible to maintain all your financial data and serve the reliable evaluated reports to the prospective investors, etc. A CFO, on the other, has the responsibility to manage and control all the financial equations of an organization.
· The job of an accountant is bookkeeping, posting account payables, journal entities, etc. whereas the job of a CFO is financial data analysis, checking business performances, etc.
2. Access the ability of the accountant
Once you decide your requirements, then you have to assess the accountant well. The best thing to do for this is,
· Check the skills during the time of the interview.
· Give some assessment works to do once the clearance of the preliminary round of interviews.
· Check their educational qualifications well before planning for any further. If they have any previous working qualifications, looking after their background becomes the primary need before hiring.
3. Ask the accountant for his/her serving
You have to get a brief knowledge regarding what plans he/she has in mind to fulfill and foster your business needs. Explaining a little about the challenges and other essentials of your business will help you to know about the same more aptly.
Step 2: Discuss every financial term of the business with him
Once you hire an accountant for your business needs, then you need to be clear enough with him/her. Every financial term and fact should be clear to the accountant so that he/she can easefully proceed to the respective plans and execute them well.
- Organize Meetings
You have to organize a meeting within a pre-defined interval to discuss every aspect of the business’s financial terms.
2. Have discussion
Knowing all the plans and programs he/she necessitates to serve the duty well is another of your important tasks.
· Make plans to strengthen internal controls.
· Speculating the checks and balances on a regular basis.
· How he/she will utilize the online accounting software to save time in maintaining payments.
Step 3: Evaluate the activities
Lastly, you have to evaluate the activities of the accountant, especially once the report gets prepared. This is because the terms with the investors or partners are solely maintained by the reliable report sent by the accountant. Any loophole in it can create huge problems for your businesses, which may be difficult to resolve in the short term.
1. Scrutinize the reports before dispersal
It is important to scrutinize the reports before it is sent to others. This is because, based on the authenticity and reliability of reports, the impression of your company will be decided. Moreover any fraudulent activity can also be detected through proper speculation.
2. Evaluate with proper information
As you are running a business, you should have all the information either for finances or any other aspects of your business. So, no one else can evaluate the activities better than you. Moreover, if you have any trustworthy person to handle all your business aspects, you can get the things done by them also. But the final thing should go by your end only.
3. Check the scheduled regular third party reviews
It is very critical to review the internal controls with an objective and independent third party. Thus, after a certain interval, such as after 1 month or 15 days, you should have to check the maintenance of the bank statements, registers, bank reconciliations, etc. carried out by the accountant.
