MARIO NOWOGRODZKI, CPA/CITP

Founder and Principal

Why Should Small Business Care About Internal Controls? (part 2)

Here is more on internal controls, part 2 of last month's article...

Accounting system procedures and controls: An important step in setting up internal controls is creating accounting procedures and implementing controls. One example is determining who has access to QuickBooks and which areas and functions they will be accessing. As a rule of thumb we emphasize that no one should use the QuickBooks ADMIN user as their everyday login; you can assign full-access permissions to certain users if needed (especially if additional checks and balances exist), but they should have their own username, to validate the use of the QuickBooks Audit Trail.

Financial statement accuracy: Every small business owner should consider having an independent outside party such as their QuickBooks consultant review their books on a periodic basis. And the owner should also have a good understanding of the financials, which is why we cover that as part of any QuickBooks implementation or training.

In conclusion, internal controls are necessary to reduce the risk of fraud. Without controls or oversight, it is like leaving the door unlocked with the cash register drawer open hoping that no one will steal anything.

This was the topic of the most well-attended breakout session at the recent FABexpo in Tampa, that I had the honor to facilitate. Included in the presentation were examples of how to implement good internal controls using QuickBooks financial software.

...MARIO