Internal Controls: 3 Areas You Can Access Now!
Editor’s Note: This Article Has Been Updated on 8/8/2023
Although internal controls may seem like a topic most often covered by investigations into fraudulent activity, or for large public/private companies, internal controls are a critical element of ANY company’s potential success.
The time is now to look at your internal controls design, and not when fraudulent activity is being investigated within your entity. Waiting until you’re making reactive decisions on internal controls can harm your company’s credibility amongst stakeholders, employees, and customers alike.
In order to determine that your company’s internal control design is on the right track, here are 3 areas that you can assess right now:
Are you setting an ethical tone at the top?
A major foundation of internal controls is the assessment of a company’s control environment. This includes the tone set at the top of the organization and how executive leadership will influence employee behavior. If leadership is able to operate with integrity and ethical values, there is a likely chance that this creates a culture of accountability and responsibility across the organization.
Are you appropriately staffed?
In addition to hiring and retaining ethical employees, a company’s internal control environment should also focus on the number of employees working in certain positions. If one person is handling a company’s entire financial cycle, this creates unnecessary risks for overworking, manual errors not being rectified timely, fraudulent activity, and setting up your company for chaos if the single employee leaves.
Examine Information and Communication Systems.
Are your internal departments and employees communicating timely and providing value to each other? Especially within the accounting information system, communication between those involved and those affected by any financial reports is key to success. Take a look at the accounting-system-generated financial reports and determine if they are accurate and up to date with the company’s transactions. If they are not, it may be time to bring the team together to discuss where efficiencies can be gained.
These tasks will not evaluate your internal control design effectiveness completely, however, your company will be set up with a great start into 2022 if you’re able to set an ethical tone at the top, staff your company appropriately with qualified individuals, and review internal communications and reporting to make sure your financials are up to date.
BOOST LLC provides government compliant and strategic corporate back-office operational support and candid business advice, combining our team of experienced and trained professionals with the drive of entrepreneurs to enable small businesses to become successful with government contracting. We have SMEs to support our clients’ growth in the areas of accounting, contracts, HR, recruiting, and strategic pricing.
Want to learn more about how BOOST can help with your Internal Controls or Accounting for GovCons in general? Contact us today!
About BOOST’s CEO, Stephanie Alexander
Stephanie Alexander has spent more decades than she wants to admit supporting high growth government contractors with an eye towards their bottom line. She is the CEO and founder of BOOST LLC which supports back-office functions for government contractors. She is a co-founder and Partner at govmates, a free teaming platform and technology scouting tool to connect business across the federal landscape.
