Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsBenefits of Financial ControlsFinancial control procedures ensure that allfinancial information is recorded andaccurate.Some of the benefi ts of implementing fi nancialcontrols are:HINTIf you are using inaccuratefi nancial information fordecision-making, you couldbe making the wrongdecisions• Regular reporting will provide accuratefi nancial information that can be usedby those responsible for the operations of the business (for example,sales numbers can be provided to sales representatives to monitor targetsand budgets);• Business can make informed decisions on budgets and spending;• Controls provide documentary proof for compliance requirements; and• Business standards are set and every person within the business is informedof these standards through reporting.Good fi nancial control procedures will:ProcedureAlign objectivesof the businessSafeguard assetsPrevent anddetect fraud anderrorEncourage goodmanagementDescriptionsEnsure that reporting procedures and the activitiescarried out by the business are in line with theobjectives of the business.Ensure that the physical and monetary assets of thebusiness are protected from fraud, theft and errors.Ensure that the systems can quickly identify errorsand fraud as and when they occur.Allow the manager to receive timely and relevantinformation on performance against targets, as wellas key fi gures that can indicate variances fromtarget.160chapter 7-13 p79-181 Eng.indd 1608/15/11 5:03:09 PM