What this means
Internal control does not begin with a large policy manual. Start with the transaction cycles where cash, inventory, revenue and payments move through the business.
Practical points
For purchases, separate vendor creation, purchase approval, receipt confirmation and payment authorisation where practical. For sales, control customer master changes, credit terms, invoicing and collections. For banking, use maker-checker controls and review user access periodically.
Control and documentation
Small teams may not have perfect segregation of duties. In that case, compensating review by an owner or senior manager becomes important. Use exception reports rather than trying to review every transaction manually.
Before you act
Document who can approve what, retain evidence, and revisit the design as the business grows. A control that worked for a five-person team may be inadequate at fifty.
Sources
This article is general educational information as at the review date shown above. It is not a substitute for the legislation, notification, circular or advice applicable to a particular person or transaction. Verify the current official source before acting.