The controls you have over cash and inventory is very important. There are two types of internal controls:
- Preventative those such as requires dual signatures on EFT authorisations, this type protects and limits access to business assets.
- Detective, reconciliation of bank accounts and asset registers or inventory stock take. This is proactive performed to see if any need for correction is required.
Internal controls are the processes, checks and balances that need to be put in place as a business grows. Internal controls can relate to any aspect of your business, from human resources to IT. Internal controls in accounting are critical and are used for safeguarding assets. Having a system of internal controls, including a segregation of duties, matters because as much as you trust your team, simply having a team means there is no longer one person with complete oversight and knowledge of the operations.
By reviewing your internal controls for you we can assist in improving your procedures and help lower the chances of potential losses through theft and fraud.