[#BusinessManagement] #Startup, #Authorization, #Budgeting,
#Forecasting, #InternalControl, #Project, #Change, #Integration (5/5)
10.
Summary: Internal control, something about business
management.
1) In internal control, I frequently encountered
these situations when establishing work departmental [checks and balances]
mechanism:
i. People [don’t know or disagree] the
nature of their work rights and responsibilities.
The [Expense Payment Request] in overall work environment, people think
it only needs the requester’s department head’s approval, and the Accounting or
Finance Department cannot reject the request, it must enter the payment work
process.👈 In
this kind of work environment, it is not proper to build up a Finance Controller work role, because,
this kind of work environment has told [Finance and Accounting are not allowed to control
payment request]. What’s your idea?!
ii. [Junior] Emily has also been corrected:
in urgent payment request, it can skip [Accounting Department] and directly go
to Finance Department for payment work procedure!
Internal control work spirit: excluding petty cash mechanism, all the
payment request documents, after being approved by responsible managers, they
need to go to Accounting Department/accountants for accounting entries works
first, then enter payment work procedure. 👈To verify the appropriateness of those [payment
request documents] = To verify [whether those transaction documents are
suitable for accounting works], thus, it needs to go through accounting work
process before finance payment work process; if it is paid first, it becomes a
transaction that must be booked, and if the documents are not proper, people
can improve it, though, there is less internal control.
iii. Accounting Department believes they are
only responsible for receiving documents passively and do accounting works
only, then submitting the finance statements; if there is disbursement not being
requested for payment, transactions records in ERP system have not been posted
to accounting process etc., all belong to others work responsibilities.👈 To ensure the completeness of accounting
records is Accounting Department’s work responsibility; e.g. if there is no
utilities expense payment request, Accounting Department can do accrual works
based on historical records and assess its amount.
iv. There are some work roles possessing
specific work rights, however, they don’t have to take relative work responsibilities,
or, they don’t know how to be responsible for it:
a. The boss always tells their secretary to deliver their work instruction; the work environment and atmosphere will change to: what the secretary says is what the boss says, no one dares to doubt about it, or, it causes people work hesitation and reduce work efficiency accordingly; or, the situation in subsidiary is always [HQ says]…👈People can talk to the secretary and ask it is the secretary’s personal suggestion or it is boss’ work instruction, and people can also talk to the messenger: who is the person of HQ saying this(name of department and work title)?
b. Auditing Department is allowed to review any data, including salary record; HR Department is allowed to reject to provide salary data for reviewing based on data confidentiality issue.👈 HR Department should let Auditing Department know, if they need to access salary record, they need to request for approval by OOO (Chairman or Audit Head) for accessing. This rule should have been an implemented work policy.
v.
Reports are generated by system, thus, reports
preparation work owner is [computer system].
Does this situation exist in your
company?!
If it happened to managers of specific work level, I suggest the
boss has concern about this manager whether this person possess enough work
leadership, because it affects your team’s awareness of [morale] and
[accountability] , and finally, it affects their professional growth.
Specific work level: I define it as the
middle level Manager(there are Director and VP higher than this Manager level);
and, indeed, if it happens to Director work level persons, it means they are____.
For your reference and please define your own tolerance.
2) This section describes cross-department work
processes division of labor about the roles and responsibilities from products
development/no manufacturing process to payment process. In most companies,
they are discussing: QC approval department, payment requester department, and
how to appropriately define these work owners departments?! Please see below
chart for your reference, and its work environment is their Products Department
is responsible for all products related situation:
3) Please let us know your company’s Legal Department’s opinion: can Auditing Department look through employees’
items in their drawers in the office without employees’ consent?!
4) In above HQ and subsidiaries organizational management, please let us
know your Group: it is known that the Group is going to build up overseas’ subsidiaries
and assign people in OO managerial role in HQ to take the subsidiaries General
Managers’ roles and responsibilities; in organizational design and overall
business plan, under the subsidiaries General Managers, the department heads
are [Managers] level. Please let us know how to define the work level of OO
more appropriate?!
Finally, I would like to share with you
about the internal control quotes I’ve learned:
[There is no perfect internal control
in this world],
[Internal control cannot avoid joint
fraud];
What does it mean?! 👈 Lose [internal control function], not doing the control, [controlling function] and [executing function] working together on things they are not allowed to do. There are lots of reason, though, they can be found through auditing or work rotation, however, they cannot be [timely] detected, so there are some companies setting up a [report mailbox] work function, it is to remind everyone not to do anything not good, and, do not report without discretion. For your reference.
Share with you. Thank you very much!
Thank you for affirmation; in above sharing, if you would like to say： [Emily, if we don’t read your OOO
sharing, how can we have that kind of capability?]
I suggest you to do this and also think whether it is suitable to your company work culture: from managers to all the employees, besides doing their own jobs well, people also practice this kind of mindset: [If I were he/she(=the person or department we are talking or interacting with), what I can do better for this whole situation?! And what information is required?!] 👈 I hope this is helpful to you.
Thank you for sponsoring, recommendation and your good deeds; I
feel grateful, sincerely bless you! 💖💖💖💖🍎🍀🎉
Recommended song
Bruno Mars - Just The Way You Are
https://www.youtube.com/watch?v=wGUKBXpfU1o
1.
What is Project,
what is Risk?! Who can serve as the project manager?! Does Risk mean Danger?
2.
How the founders can authorize hired
managers appropriately so that the managers will not overstep their authority
without approval?!
P01-P02 https://whatsyouridea1996.blogspot.com/2024/03/startups-plan-control-integrate-eng.html
3. What is the connection among the
operating plan (business plan and financial model), budget, forecast and
business analysis?! Are they just putting the same number in different places,
right?!
P03 https://adv1996.blogspot.com/2024/05/startups-plan-control-integrate-eng03.html
4.
According to 3.,
what information does the Business Analysis (BA) provide for the [Business Review
Meeting] (BRM)?! (suggestions including 4 charts: Achievement and Trend Report,
Cash Flow Control Chart and Sales Analysis, [Early Warning, Opportunity and
Action Progress Summary])
5.
Change and integration are also project-based work; please
define OO first. What do you think OO is?!
6.
For example: to change corporate work culture, the difficulty
may come from people who have management power= people who want to change the
work culture, it is possible.(This may differ from your company's corporate
culture or environmental perception)
P04-P06 https://whatsyouridea1996.blogspot.com/2024/05/startups-plan-control-integrate-eng04.html
7.
Share: 1 form that must be used in integrating the work
processes.
8.
Because money is very important, use [internal control] in finance and
accounting work operations to explain the internal control issues when
establishing subsidiaries/business expansion. (Please answer first: In addition
to morality and conscience, why should the CFO of the subsidiary need to obey
the finance and accounting work instructions from HQ?!)
9.
Only companies that need an e- approval platform and need
[approval records] and [approval efficiency] should read this.
P07-P09 https://whatsyouridea1996.blogspot.com/2024/05/startups-plan-control-integrate-eng07.html
10.
Summary: Internal control, something about business
management.
P10 https://adv1996.blogspot.com/2024/05/startups-plan-control-integrate-eng10.html
