What is financial control in management?
The systems, policies, and methods through which an organization monitors and regulates the direction, allocation, and use of its financial resources are known as financial controls. Financial controls are at the heart of any organization's resource management and operational efficiency.
Why do I need financial controls?
Part of efficiently managing risk for successful firms is building and implementing appropriate internal financial controls. Internal controls protect a company's financial assets while ensuring employees follow policy, procedure, and legislation. Understanding financial controls and investing in tools to help you build and implement them can give your organization a significant advantage in lowering risk, guaranteeing financial accountability, and making smart, strategic spending decisions.
Financial controls are critical for guaranteeing the accuracy of reporting, preventing fraud, and safeguarding the organization's physical and intangible assets. Internal control measures reduce variation in the process, resulting in more predictable results. Financial controls are essential for:
Ensuring accurate financial reporting: Financial controls maintain the accuracy of reports, reflecting the true financial status of the business, which is crucial for informed decision-making.
Preventing and detecting fraud: These controls help identify irregularities like fraud or theft, ensuring financial integrity through measures such as regular audits and segregation of duties.
Safeguarding assets: Controls protect tangible and intangible assets from misuse, loss, or theft through systems like inventory management and access restrictions.
Boosting operational efficiency: By minimizing waste and streamlining processes, financial controls enhance business operations' overall efficiency and cost-effectiveness.
Compliance with laws: They ensure adherence to relevant laws and regulations, avoiding legal penalties and reputation damage.
Building stakeholder confidence: Robust controls strengthen stakeholder and investor trust, enhancing the company's credibility and potentially leading to better investment opportunities.
Supporting strategic decision-making: By providing reliable financial data, these controls aid leaders in effective forecasting, planning, and strategic decision-making.
Facilitating accountability: Financial controls promote responsibility through clear record-keeping, holding individuals or departments accountable for financial decisions and actions.
How the 6clicks general financial controls can help
Money is the lifeblood of organizations, and their success depends on managing it well. Financial controls are the measures employed by an organization to ensure robust financial governance is in place.
Here's a quick look into the controls waiting for you inside 6clicks.
Broad administrative activities, including processes related to financial close, management review and oversight, financial master data and bank account control.
Hire to retire
This is a big one, as it includes processes related to recruitment and hiring, payroll, terminal and personnel master data. More specifically, payroll preparation and security, payroll payment controls, payroll distribution, compensation and benefits, hiring and termination, etc. These are all important workforce contingencies related to the H2R process.
Contract to cash
Understandably, there are quite a few super handy controls in here for you, including customer contracting, order management, invoices, credit and receivables management and customer master data.
Procure to pay
This links purchasing and accounts payable systems to improve efficiency, known as procure-to-pay (or, req-to-cheque). It's part of a wider procurement management process that includes four stages: selecting products and services, enforcing compliance and order, receiving and reconciliation, and invoicing and payment.
This set of controls gives you some excellent direction on vendor management, purchasing, payments and supplier master data.
Automate with 6clicks
The 6clicks General Financial Controls set is available for you now in our Content Library!
Book a demo of 6clicks below and see how we can help automate your financial controls, as well as experience our full suite of GRC modules and powerful AI engine.