May is a great month for reviewing and updating aspects of your business.
Review controls in your business
Good controls will protect both the monetary and non-monetary aspects of your business.
How to review controls
- Make a list of all the areas in your business that could have potential risk – remember to consider all aspects, such as fraudulent activity and physical assets.
- Review how each of your potential risk areas are protected by policies, procedures, physical security etc.
- Identify those which need improved controls.
When considering risk and controls, keep in mind that:
- controls must be reviewed regularly to be effective
- nearly every area of your business should have some control elements in place
- small business is often at risk of employee fraud – good controls minimise risk
- non-monetary items within your business – such as IP and brand names with patents and trademarks – also need protection.
Update key policies and procedures
Well-documented policies and procedures contribute to:
- greater control and transparency
- higher productivity
- increased customer service
- increased profitability and cash flow.
How to do update your policies and procedures
- Identify the key operational areas in your business.
- Use a one page template to document each policy, or use the financial policies and procedures manual template we've provided below.
- Document a procedure to match each policy.
- Make sure every one of your staff are aware of each policy and procedure so that it's actually implemented.
When documenting policies and procedures, remember that:
- policies should be clear, simple statements about how your business acts – they're guiding principles to help with decision making
- procedures can be forms, checklists, instructions or flowcharts, and describe how each policy will be put into action – each procedure should include who does what, the steps that need to be followed and which forms or documents to use
- staff can often provide helpful suggestions of key policies and procedures that need to be documented and you could also ask staff to do the documentation – if they're involved in creating procedures, they're more likely to follow them
- key areas of risk and compliance in your business are also a good place to look for ideas about what needs to be documented
- it's helpful to ask staff members to review procedures to ensure all steps are covered.
Review supplier contracts
Review your supplier contracts to ensure you're getting the most from the relationship.
How to review your supplier contacts
- Make a list of what's important to your business from your supplier, such as timely delivery, quality product, good price – our checklist for finding and choosing suppliers provides some great tips and advice
- Check each supplier against the list and rank the importance and service of each supplier.
- Discuss any issues identified with your suppliers to seek improvements in line with your priorities.
- Research other potential suppliers that can match the criteria set out in your list and approach them for discussion on supply.
When reviewing your supplier contacts, try to:
- meet with any suppliers whose prices are increasing – there may be an alternative solution
- keep all supplier contracts and agreements up-to-date and filed together to make the review easier
- have a back-up supplier for critical products or services to your business
- find out information about your industry trends from your suppliers – they may supply your competitors and have information that you can use.