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What is internal control and how can you re-gain control over it?

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Do you have goals for your organization? How do you ensure that your goals are met? What do you do to push yourself and your business further? Do your employees have some type of reporting standard that helps you to track the goals and to make sure they are meeting your expectations? So how does internal control step in and help you? Internal control is the process that helps you with the overall structure of your company. You will be able to set goals and have a system to follow that ensures you will actually meet your goals and expectations.

The biggest area that financial control will impact is the company's finances. Since it is common to have financial struggles from time to time, internal control helps you to avoid losing money and to always have enough to pay for the needs of your company.

The entire process is very easy to implement as it typically comes down to some very easy tools:

  • Reliability

  • Regulations

  • Reduce or eliminate waste

  • Company safety

Let's begin with reliability and what that means for your business. Reliability simply means you will create a system whereby your books are properly kept. You will be able to make sure they are in balance with all of the various departments that can have an impact on the books. What internal control helps with is to make sure money is not being stolen from your company along with other vital things like your inventory. It makes sure that the credit card payments are being properly deposited into your accounts and it also makes sure that your staff is paid on time and in full. For accounting, internal control is by far one of the best systems you will ever implement. It helps with timeliness, which is a huge part of being known as a reliable company.

The other part of internal control has to do with regulations. This is necessary if you have investors in your business as they need to see that you are following the rules and standards that have been laid forth by the government for your particular business entity. If you are complying to regulations, you will eventually face a hefty fine for it so it's best to avoid it at all costs by using internal control.

No matter what type of business you may be running, dealing with waste is always a big problem. Waste can refer to more than wasted products as it also refers to wasted time. Internal control allows you to organize your business in an effective manner so you won't have any type of waste. It will allow your employees to feel satisfied in their job duties as they have plenty of responsibilities to keep them occupied. Look into implementing a Six Sigma or lean manufacturing process if you have a lot of wasted time, money, space, equipment, etc. as it will help you to significantly reduce it.

Safety is always a big concern with any business. Companies that deal with manufacturing often have more worries pertaining to safety as their staff members can easily get hurt. Internal control allows you to have proper signage around the building and you can also implement a behavior-based safety program that will also help to keep your employees safe.

There are many other aspects of internal control but these various methods tend to stand out the most. They will all be able to help you increase efficiency and to have a better working environment for all of your employees and your customers will also be able to notice the difference.

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