Getting control over your business finances is goal number one for any organization. Mid-size businesses often face financial control issues over payments and spending as they grow from a small-medium busines. So financial processes need to be efficient, secure, and controlled when it comes to keeping finances flowing in the right direction. Big companies usually have the added luxury of entire departments to ensure business finances stay on course, while mid-size companies are often more resource-constrained. So what are the steps to gaining better financial control for your mid-size business?
Step 1. Strong Financial Procedures
Before you expand any further, you should establish strong financial procedures to ensure you have a solid structure for your growing business. For example, developing your own strategy for financial approvals. Oftentimes mid-size businesses make the mistake of putting too many financial responsibilities in the hands of too few employees.
No matter the size of your staff, your company should clearly outline which employees have permission to handle specific documents so you avoid mistakes and misunderstandings. It may be one person in some cases or several. For account payable approvals, your policy should be very clear on who is authorized to approve invoices and payments for the company, including the approval of expenses on credit and debit cards. Also, any changes to a checking or savings account should go through the correct approval channels. Like payables, receivables should never just be assigned to one person. Make sure your procedures for taking in money have a system of checks and balances. Finally, decide who in the company approves new vendors and who can access vendor information.
Mid-size businesses require a solution where payment and vendor approval routes can be set at the highest level, so there is no chance for missed steps (and, therefore, you’ll avoid costly errors and catch any potential fraudulent activities) in the workflow process. Finance heads can create advanced rules in seconds, ensuring transactions are authorized and approved by the correct person or team and are consistent with business goals and objectives.
As your business grows, leveraging automation for keeping your policies and procedures enforced, becomes paramount. Especially in mid-size businesses, where resources are constrained, manual processes that take time, and abundant paper trails can cause undo chaos. Automating approvals and setting policies through automation is not only more secure, but more efficient and saves on overall costs.
Step 2. Checks and Balances
Reducing fraud is a never-ending challenge for any business. Fraud can come from internal or external sources. To protect your business from internal fraud, use a system of checks and balances to ensure no one employee has control over all parts of a financial transaction. Separate tasks where fraud is more likely to occur, such as receiving payments and recording payments. Be sure to reconcile accounts on a regular schedule.
Leverage an automated system that offers dual control, which separates accounting duties but keeps bookkeeping under careful control because a single user can’t perform conflicting tasks. Dual Control requires two people for approvals, which reduces the possibility of fraud and decreases errors by requiring a second user to review actions before they’re submitted. The tool also requires multiple approvers for modifications such as adding company or vendor bank accounts, adding or deleting users and editing permissions, and setting and updating user roles.
Step 3. Establish Security Protections
Your company’s financial information should also be protected with the highest security controls available, and that includes ensuring any automation system or cloud application you deploy has Single Sign-On (SSO), as one such effective solution. SSO is a technology that merges several different login screens into one entry point. With SSO, the user only needs to enter their login username, and password once and then gets access to most or all of their applications. Besides being simpler and more convenient for users, SSO is also more secure because 1) passwords are stronger; 2) passwords don’t get repeated over different applications; 3) multi-factor authentications are in place; 4) administrators can control password policies.
Commit to Better Control
Bill.com offers an automated approach to accomplish the three steps and more to gaining better financial control for your mid-size business. Bill.com is a cloud-based application that offers an all-inclusive automated accounts payable (AP) and account receivable (AR) solution that can reduce the paperwork, resource and time constraints of manual operations. Bill.com allows users to set procedures and workflows for approvals through automated payments, and has the security features of SSO and money transmitter licenses in all 50 states. Bill.com also provides international payments. Your company is too important to forgo taking these crucial steps to ensure financial control and security are in place to protect your money at the highest level possible. You can start implementing stronger financial controls today.