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Who’s In Charge of Finance Controls Anyway?

If you could think of one image to symbolize finance controls, what would it be?

Get a mirror. It’s you, if you are a member of the finance or accounting team. All members of the finance team are important to the establishment of financial controls as all members work with the numbers.

It doesn’t take a CPA to realize that having one person perform an action and then authorize or approve that action doesn’t make sense. Segregation of duties is not meant to add more people to the process. Segregation of duties keeps things arranged so that they do make sense. And in the case of finance, segregation of duties helps keep the people, the process and the numbers compliant.

It’s common sense to require an invoice for all payments. Although many invoices can be complex and have certain codes with departmental meaning, the back of a napkin with the date, description of services and amount charged may suffice. The point is to have the policy in place as a small part of your financial controls.

Would you think it a good idea for a college professor to allow her students to grade their own comprehensive, end-of-the-semester essay exams?

In a similar vein, it is also not a good idea to let the employee writing and depositing checks for your company be the person who reviews bank statements. Much wrong doing can be uncovered by a thorough analysis of a bank statement. This policy, as part of your finance controls, helps to prevent fraud.

So how do you set up all of these finance controls? How do you keep them current and ensure your accounting and finance teams abide by them? (Some images likely come to mind here.)

One solution is by automating your account reconciliation and financial close processes. Many solutions make it easy for users to access policies and procedures, establish a workflow with built-in segregation of duties, and automatically create an audit trail while the work is being completed.

SkyStem’s ART is an account reconciliation and financial close automation solution. ART is a favorite of CFOs, Financial Controllers and Accounting Managers due to the visibility and accountability it provides, as well as the segregation of duties and SOX compliance it helps establish.

You can see how ART helps you implement finance controls here.

By |2023-03-11T18:05:25+00:00July 8th, 2015|Blog|0 Comments
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