Internal Controls

You’ve worked hard to reach the pinnacle of your field. As an independent business owner, savvy individual or industry executive, you’ve earned your place in the world. Now you want to protect what you have, while sowing the seeds of growth. The lifestyle you enjoy today is the result of:

• Maintaining your vision
• Working towards a goal
• Having the discipline to stick to your plan
  
  

Your peace of mind comes from knowing your resources are secure. It’s through a wide range of practical protections — including internal controls for your cash, internal controls accounting and audit certification — that you’re able to completely embrace the lifestyle that you deserve.

BRING IN THE BARRIERS

No business is too small to institute a variety of internal controls. Many NYC entrepreneurs believe that they don’t have the kind of exposure that big businesses have, so they don’t take the precautions required to prevent unnecessary — and sometimes even illegal — losses.

Instead, with audit controls in place, your NYC tax accountants can catch mistakes and outright fraudulent maneuvers — if not before, then very shortly after, they occur. Some of the places where you might find yourself vulnerable to fraud, mishaps or oversights include:

• Account payables in which you may be overcharged by vendors or where untrustworthy employees can create false invoices
• Check signing privileges to staff or contractors who don’t closely watch the payment schedules
• Employees or contractors not fulfilling their agreements
• Disbursements that aren’t closely monitored
• Managing Cash Flow that leaves wiggle room for embezzlement
• Collections that just write off bad debts inappropriately
• Workers’ compensation fraud
• Accounting for Payroll that doesn’t accurately portray the real work being done

INTERNAL CONTROLS FOR CASH

Collecting and disbursing cash is by far the one area that holds the greatest risk for fraud. Mistakes that continue to occur without inspection can lead to dramatic losses in both your business accounts and your personal wealth. You can take steps to prevent it.

When you hire a CPA in NYC or Queens with Miller & Company, you receive lists of recommendations for internal controls that are uniquely suited to your particular business and personal needs. For example, your best rated NYC CPA would suggest a change to how you count the money in your cash registers if you own a string of franchises across Manhattan and the greater New York City metropolitan area. Instead of you counting it every day, designate two people to do it and a third person to make the bank deposits.

Other common internal controls for keeping your cash flow straight and your staff members honest include:

• Requiring two signatures on checks
• Allowing surprise audits
• Inspecting inventory on an irregular basis
• Setting up procedures for anonymous whistleblowing
• Requiring documentation trails
• Running background checks
• Limiting access to accounting books
• Bringing in a third-party CPA for audited financial statements
• Appraising key assets and resources occasionally
• Setting up computer controls

AUDIT CONTROLS

In addition, your policies and procedures should state, in no uncertain terms, that you have zero tolerance for dishonesty from those people and businesses you do business with. Key controls give you and your employees transparency. When your team follows consistent patterns of documentation and accountability, you facilitate the success of your business.

No matter what size of enterprise you run, the internal controls you set up with your personal accountant will save you money in both the short term and the long run. It’s never too early to do a surprise internal control audit, but it can be too late. According to the Association of Certified Fraud Examiners, companies with less than 100 employees accounted for the majority of fraud complaints in 2014

Read more at https://www.cpafirmnyc.com/internal-controls