There is absolutely nothing to be gained from putting blood, sweat and tears into building a successful business and then having all that hard work go down the drain.
Businesses go ‘down the drain’ because there are inadequate or no controls in place and a lack of process.
You need to develop processes for your team to follow. This ensures you have consistency across the business and gives you some certainty that the work is being completed to your satisfaction. New staff members have something to follow, and when a team member is away, other staff can cover by following the documented processes.
You need to document processes – what, how and when things are done in the business. Controls are a series of checks and balances to ensure processes are being followed.
Implementing monthly checklists is an easy way of checking that everything is being managed correctly and that timely checks and balances are taking place. Different team members may be responsible for checking certain things but at the end of each month, you as the business owner will have confidence that the team (and business) are under control. This will give you great visibility and helps to reduce stress. Once the monthly checklist is in place, it needs to be completed by say the second day of each month and this should be non-negotiable, no excuses.
Develop your checklists so they are relevant to your particular business. You will have different categories or mini checklists within your overall checklist, with various team members responsible for signing off. Some very general categories within your checklist could be:
- Communications (website, phones, backups)
- Accounts (debtors, bank reconciliations, cashbook, KPIs, end of month reports, creditors)
- Staff (organisation chart, credit cards, performance reviews)
- Accreditations and licences
- Premises (first aid kit, fire systems and alarms)
- Health and safety (meetings, incident reports, documentation)
- Stock systems (pricing, expired stock, levels)
- IRD (returns and payments)
You may just start off with a few items and build it up over time. You will be amazed that as the list increases, your stress levels reduce!
In addition to having clear processes and systems, robust controls help to minimise fraud. Small businesses can sit on increased risk around fraud due to a lack of separation of duties. You may only have one administration person who is responsible for everything; however, good practice means the same person should not be entering, authorising and making payments. If this is the case in your business, think about what you can do to minimise risk. Never use the excuse of being too busy to review documents and authorise.
Fraudsters are not always obvious – they move around and are devious, cunning and make the most of opportunities as they present themselves. It is quite common for small business owners to have little appetite for wading through creditors and authorising payments, but this can be an easy area for fraudsters to target. Credit cards, stock and cash are also obvious areas to watch. Fraud can be external or internal to your business.
In addition to fraud, there is always the risk that errors (lack of training and/or incompetence) could be affecting your business so by implementing processes, checks and controls, you will minimise your business risk and stress at the same time.