Setting up internal controls will vary for each business. Some areas of the business are more at risk of loss or fraud and require more stringent controls. It is important to go through each aspect of your business and review whether you have controls in place. Who is responsible for making your business deposits? Who is responsible for ensuring all payments received are timely updated on clients accounts? Who is responsible for ensuring business expenses stay within forecasted budget? These are the questions a company's management should have identified and documented as part of the business internal controls. Accounts receivable are an important asset of the business. Delays or failure to collect accounts can result in cash flow shortages and profit erosion. Consider the following:
Source: InternalControlsforSmallBusiness Face reality as it is, not as it was or as you wish it to be. – Jack Welch
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Start each day with your best foot, thoughts and attitude!" The entrepreneur is essentially a visualizer and actualizer....He can visualize something, and when he visualizes it he sees exactly how to make it happen". - Robert L Schwartz Having the ability to think critically is an important skill that many people lack. Critical thinking is the best way to solve problems since it requires looking at an issue from several standpoints before reaching a final decision. In history, both Socrates and Buddha preached about the important role that critical thinking plays in an individual’s ability to reasonably reflect on an issue and subsequently decide what to do or believe. Below is one skill to review and consider as you make changes in your career or entrepreneurship. Skill #1: Interpretation What it Means: Having the ability to understand the information you are being presented with and being able to communicate the meaning of that information to others. Throughout your career you will be presented with a variety of information in many different types of situations. Imagine you are looking at demographic information, hoping to target a different group of customers for a new product. Interpretation skills will enable you to better decode the information and add clarity to what you have discovered - which in turn will help you better understand any potential new customer opportunities for your company. Continue to visit our blog for more skill topics and analytical discussions. Source: Examiner.com
Desire is the key to motivation, but it’s determination and commitment to an unrelenting pursuit of your goal — a commitment to excellence — that will enable you to attain the success you seek.”–Mario Andretti Performing monthly balance sheet account reconciliations are critical not just for management but also the accountants responsible. It can be a tedious assignment and it requires critical thinking and well outlined explanations to ensure management can feel confident about the balances. Here a 4 key tips for reconciliations:
February 2016I am very excited to share my February 2016 business newsletter "Fontenot News". Our mission to corporations and small business is to support in "Closing process gaps with actual solutions". Our solutions incorporate policy and procedure developments, training, account reconciliation improvements and overall accounting support! Enjoy our newsletter at your leisure! Take a minute to join our email list to have future newsletters and other exciting news sent directly to you each month! Email: Terra@Fontenotsolutions.com Good day to everyone! Give yourself an even greater challenge than the one you are trying to master and you will develop the powers necessary to overcome the original difficulty.”–William J. Bennett – The Book of Virtues Challenges are what make life interesting and overcoming them is what makes life meaningful." - Joshua Marine creating journal entriesWhen a company records a business transaction, it is not entered into an accounting equation, per se. Rather, transactions are recorded into specific accounts contained in the company's general ledger. For example, let's assume your planning to start your own business and plan to invest personal funds into the start up of the business of $15,000. The general ledger entry would be recorded by the Accountant as shown below. The recording of this journal entry also means a balance sheet can be created to reflect the financial position of the company.
Only accountants can save the world - through peace, goodwill and reconciliations." When many of us think of internal controls or internal auditors we often say to ourselves, under our breath, what do they want now? But my experiences now say - maybe I should cut them a break, they are on my side. Establishing internal controls protect a business owner in many ways. Just think, without them, how would our businesses protect their financial data. Many of our young professionals step into their careers without a clear understanding of the internal control importance. I believe a contribution to this fact goes back to the curriculum at our Universities. Giving more in-depth lessons surrounding internal control could close this gap of understanding for our young and eager professionals. This is why I appreciated the article written by Miranda Brookins, Demand Media in the Houston Chronicle titled "What is the Purpose of Internal Controls of a Company?" in which it outlined 6 primary purposes of establishing internal controls in a company. 1. Establish Protocols 2. Prevent Fraud and Theft 3. Separation of Duties 4. Organize Information 5. Reduce Errors 6. Uphold Sarbanes-Oxley Act The complete article can be found on www.smallbusiness.chron.com.
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