How Can Internal Controls in Your Business Facilitate Better Financial Statement Presentation?

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When a company wishes to have its management practices performed in relation to its general, as well as financial aspects, in the best possible manner, it usually takes recourse to setting up a number of specially designed procedures that will promote and protect such aims. These sets of procedures are known as internal accounting controls. With these internal accounting controls in place, a company can get access to reliable and trustworthy information pertaining to its finances that will help management in the form of managers and the board to make informed decisions to promote the prosperity and soundness of the company. It shall also play an important role in ensuring that assets of the company and important records of the organization are not misused in any way, stolen, mishandled, or destroyed unwittingly or accidentally.

Having internal accounting controls in place ensures that the company is able to see to it that its policies are indeed on track, and that the company is also acting in accordance and in compliance with governmental regulations. The steps needed to develop an internal accounting control system would likely begin with those areas of operations of the company that are subject to abuse, or where mistakes are often being made. To get all available information related to such problematic areas, the help of the company’s accountant may be enlisted who can provide checklists of the affected areas.

Some of the important areas of a company’s operations that can be targeted for having internal accounting controls include the area of cash receipts, cash disbursements, petty cash, payroll, grants, gifts as well as bequests, and fixed assets. There may also be need to employ extra internal controls so that areas such as donated materials, pledges as well as other revenues are taken into the ambit of the internal accounting controls.

To have a successful internal accounting control in place would require that the company set out unambiguously the procedures that will be used to handle each area. This means having checks and balances systems in place so that no financial transaction could be handled by a single person from the start until the very end of the transaction. Such a segregation of duties will prove effective in controlling the validity of transactions from start till end.

With regard to the how high the standards of accountability are, the board as well as executive director would greatly involved in setting the tone as well as ensure conscientiousness with regard to the assets and responsibilities of the company. The board would be involved with check issuance, deposits, transfers, approval of plans as well as commitments prior to implementation, and personnel policies. The company should also have an Accounting Procedures Manual that will record the policies as well as procedures related to handling of financial transactions as well as describes administrative tasks, and assign responsibility for the same. This manual could be nothing more than an easy to follow description of how various functions will be handled within the company.

It will be the duty and obligation of the executive director to oversee the day-to-day functioning and implementation of these internal accounting controls. The internal accounting controls form is readily available in the market and finding one should not pose any problem as there are many vendors who specialize in such documents and for a few dollars one may obtain completely researched and well formed internal accounting controls form. There is no need for researching and creating one from scratch as buying these documents provides an avenue for obtaining comprehensively created solutions that have had experts draft them and they are suited for all manner of use.

Spending a few dollars, one could reap great benefits as there is plenty to be saved in terms of time, money and cost as well as being tailored to suit individual requirements.

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