Stop and ask the average person in the street what an accountant does, and you’ll no doubt get the same core answers popping up again and again. Bookkeeping. Tax returns. Financial management.
Some accountancy firms, Xeinadin included, spread their wings a little further into the field of business and financial advisory. But we also offer another strand of services that fewer people will be familiar with – financial control outsourcing.
Outsourcing accountancy work is not just commonplace, it’s now standard practice, giving businesses greater flexibility and cost efficiencies compared to hiring accountants in-house. But what does financial control outsourcing entail? Or, to put the question another way – what is financial control?
Financial control boils down to financial governance. It’s about putting in place protocols for how money is managed within an organisation. The aim is to provide consistency, transparency and reliability in all financial processes, including bookkeeping and accounting. Putting the right financial controls in place therefore helps with business stability, compliance, decision-making and more.
Financial control is very much about building the right structures and creating the right culture around financial management within a business. Consequently, there are people who argue that this should be driven from within. But this doesn’t preclude outsourcing to firms like Xeinadin who have the expertise and breadth of understanding to advise on and implement watertight financial controls that are tailored to what your business most needs.
But what exactly can you expect us to take responsibility for and deliver? Here are five key functions that financial control encompasses.
Standardising documentation
A key part of implementing financial controls successfully is ensuring that everyone across an organisation is handling finances consistently. Standardised documentation makes it easier for everyone to follow the same processes, and also makes tracking financial activity easier.
Authorising access and approval
Another facet of financial governance is ensuring that robust measures are in place controlling who has access to the company’s financial resources (including data), and how use of those resources is authorised and approved. Lax measures can leave businesses exposed to errors and repetitions in things like credit control. Or more seriously, make them vulnerable to theft and fraud. Professional financial control specialists have expertise in these important security matters.
Separation of duties
Another important security principle in sound financial management is ensuring that a small number of people do not have too much control over financial matters. Separation of duties is the financial equivalent of installing fire doors – if it turns out you have one bad apple in the organisation, it stops the fire from spreading. Outsourcing to a third party automatically introduces some of that separation.
Auditing
The starting point for implementing robust financial controls is auditing current processes in order to identify where improvements can be made. But internal auditing can help with maintaining financial controls at any time. You might, for example, want to undertake periodic audits of tangible assets to check if anything is missing or unaccounted for.
Double entry and reconciliations
Finally, one of the oldest principles in accountancy is the idea of double-entry bookkeeping, which ‘doubles up’ on the recording of transactions by accounting for them as both credits and debits. This in itself is an important financial control, as any discrepancies between the two sides show that something is amiss and needs to be investigated. In that sense, any accountant you hire plays a role in your financial control protocols.
As an extension of this, it’s also advisable to carry out more in-depth periodic ‘reconciliations’, or go through all accounting records to identify anomalies and then try to account for them.
Find out more
To find out more about how we can help take your financial governance up a level, contact our team today.
