Trust Is Important. So Are Checks and Balances.
You’ve trusted the same person with payroll, supplier payments and banking for years.
They’re reliable, know the systems inside out and keep everything moving.
That’s common in a small firm. When you have a lean team, it makes sense for people to take responsibility for several areas.
The thing worth considering is what happens when one person manages a financial process from beginning to end, with no one else regularly checking it.
Good internal controls aren’t about trusting your team less. They’re about creating enough oversight to catch an error, unusual transaction or fraudulent payment earlier, while also protecting the people responsible for managing your finances.
Share responsibility where it matters
Think about how a supplier payment moves through your business.
One person might add the supplier, enter the invoice, prepare the payment, authorise it through online banking and reconcile the transaction afterwards.
That may be efficient, but it leaves very little independent oversight if something goes wrong.
Where possible, separate important steps between different people. One team member could prepare payments, while an owner or director approves them. Someone else might periodically look over bank reconciliations or payroll reports.
For smaller firms, separating every responsibility may not be realistic. Instead, focus additional checks on the areas where an error or unauthorised transaction could have the greatest financial impact.
Keep approvals clear
Everyone involved in the firm’s finances should understand what they can approve and when somebody else needs to be involved.
That could include clear processes around:
approving supplier invoices
adding or changing supplier details
authorising payments
requiring a second approval for larger transactions
making payroll changes
checking expense claims
Changes to supplier bank account details are one area where an extra step is worthwhile.
If new details arrive by email, confirm the change independently using contact information you already trust. A message can look genuine and still not have come from the supplier.
A quick check before making the payment can avoid a much more difficult conversation afterwards.
Review access as roles change
Banking and system permissions can accumulate over time.
Someone takes on extra responsibilities and receives additional access. Their role changes later, but the permissions remain.
Periodically check who has access to online banking, accounting software, payroll and other financial systems. Make sure permissions still match each person’s responsibilities and that payment limits remain appropriate.
When somebody leaves the firm, removing their access should also be a standard part of the departure process.
It’s a relatively simple housekeeping task that can easily be overlooked.
Stay connected to the numbers
Delegating financial administration is often necessary. It doesn’t mean owners need to step away from financial oversight altogether.
Regularly looking over bank transactions, supplier payments, payroll and management reports helps you stay familiar with what is happening within the firm.
You don’t need to inspect every transaction. Pay attention to unfamiliar suppliers, unexpected changes, unusual payments or figures that don’t make sense.
Often, knowing what normally looks right makes it easier to notice when something deserves a closer look.
A few checks can go a long way
Good controls don’t need to add unnecessary layers to the way your firm operates. A few well-placed checks can provide greater oversight, reduce the chance of errors going unnoticed and strengthen the way financial responsibilities are managed.
If you’d like another set of eyes on your current financial processes, talk to your usual Bennetts Proactive advisor or call 07 573 8446.