Executive Summary
The “Establishment of Controls” features in almost every job description of a Chief Financial
Officer (CFO). This article delves into what controls are and how your CFO can work with
departments across the organization to create checks and balances to ensure that fraud can be
caught (if and when it occurs) as well as to make cash use more efficient.
What are Controls?
Controls are any tools and mechanisms that capture critical data which can be used to
compare/benchmark against other sets of data. The “control” is in the act of comparing these two
sets of data. For example, if your bin card for a certain warehouse material shows “50 Units” as
unsold, yet your accounting data shows that actually 60 units are unsold – there is some level of
mismanagement or inaccurate recording happening. Having in place controls and a process of
consistently checking and comparing data is what keeps companies running without waste and
efficiently.
Controls should be established by departments within themselves (ie. Procurement controls) but
also across departments (Procurement / Accounting Controls, Sales / Manufacturing controls,
etc.). Your CFO can help you come up with Financial Controls as well as Cross-Departmental
controls which tie into aspects which directly affect the company’s bottom line.
Checks and Balances throughout your Company
Checks and balances are created by having and monitoring controls consistently. Controls can be
monitored on a daily, weekly, bi-monthly, monthly, quarterly, semi-annually, or annually depending
on how many resources it takes to monitor as well as the direct impact on the bottom line. Some
controls related health and safety of employees and customers should be especially prioritized.
How Your CFO will Establish Controls
1) Create a list of required controls by department or product, if the company is organized by
product.
2) Once these are created, he or she will also look for cross-departmental controls that make
sense to implement.3) The final list will be agreed with senior management and departmental heads.
4) The CFO will do an assessment of what controls already exist and strengthen them with forms,
added processes, or even a system if needed.
5) The CFO will finally implement new controls from scratch and create processes and
procedures to accompany them.
6) Each control will have an owner who will be trained on benchmarking and escalating when
numbers don’t match.
7) The CFO will ultimately try to build a system whereby all numbers can be uploaded/added so
that senior management can have a holistic view of the checks and balances themselves.
What if your Company Can’t Afford a Full-Time CFO?
Fractional CFO services are starting to gain traction around the continent. One leading firm in this
area is ProChange Africa, which offer hourly, daily, weekly, and monthly CFO rates. The best thing
about their approach is value add at all levels and the CFO will also be matched with your
company based on industry experience.
If you are unable to afford a fractional-CFO, consider onboarding a fractional-finance manager,
which is also offered by ProChange Africa. Some financial visibility is better than no visibility.
Check out their website: www.pro-change.co and schedule a meeting with a financial expert
today
