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Seven accounting controls that will guarantee your company doesn't make a financial loss you can't explain

by , 12 January 2015
When you think of why businesses make a financial loss, you might think it's because of poor sales.

But this isn't always the case.

More often than not, businesses lose money because of poor financial management.

All it takes is a few small mistakes. And next thing you know, you have thousands of unaccounted rands and you can't explain why or where it went.

The good news is, you can prevent the costly mistake with some simple accounting controls.

Here are seven accounting controls that will make sure your company doesn't make an unexplainable loss this year...


Use these seven accounting controls to make sure your company doesn't 'mysteriously' lose money

1. Authorisation 
Set up a system that stops anyone from making entries in your accounting records or changing them without your authorisation. 
This way you'll know entries have gone into your accounting records accurately and stay that way. 
2. Request supporting documents 
Tell your management team to show you their receipts or invoices to confirm every income or expense amount. 
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3. Cross checks
Cross check your accounting data with your bank statements every month. Check every entry in your accounting records matches the information on your bank statement. 
4. Sign in sheet
Create a system where employees sign a form before making  an entry into your accounting records. You can also create a digital system that links entries to the account or computer they came from.
This way, if you spot a mistake, you can go to the manager responsible and ask them to check and correct the mistake. 
5. Keep backup copies
Keep backup copies of all your supporting documents and accounting spreadsheets. This way you can see if anyone changed your accounting data from one week to another. 
6. Make sure everything balances
At the end of every month, do all your calculations to make sure everything balances. This will help you see if there's any money missing. 
Even if one of your management team has already done the calculations, do them again. It's important to check your accounting data because mistakes can happen. 
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7. Set up an alert system with your online banking
Set up a system on your online banking to get notifications when money comes in or goes out of your company's account. Keep these notifications and use them to fill in your accounting data in real time. These are a great way to make sure you put the right amounts into your accounting records. It also cuts out the chain of supporting documents that can get lost. 
These seven simple accounting controls will help you prevent money going missing so your company can prosper in 2015. 
For more tips and tricks for successful accounting, check out the Practical Accountancy Loose Leaf Service

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