According to the Institute of Internal Auditors (IIA), an effective system of internal controls helps ensure that our organizational processes are functioning properly, that our financial information is reliable, and that we’re in compliance with applicable regulations. Businesses primarily implement internal controls systems to protect themselves from internal fraud and abuse, while many do so with regulatory or standards compliance in mind.

It is interesting to note that, in many cases, the internal control system at many companies consists of volumes of instruction-like procedures that document activities. If a company is taking the time and effort to develop a procedure-based financial control system, it’s worth the additional effort it takes to:

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Most of us believe our companies have adequate “web presence”, considering the time and money we spend. We have a web site (Figure 1) — maybe it’s not on a level with the big consumer companies, but it tells visitors all they need to know about our company and our products/services, and it’s user-friendly.

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Officially, the worst global economic recession in several generations ended over a year ago and we are on the way back, according to the U.S. National Bureau of Economic Research. Unofficially, they need to revisit their definition of “recession”, as most of us are still plagued by a tight money supply, a lethargic job market, stagnating production and a general crisis of confidence.

Some of you aren’t buying the “fear, uncertainty, and doubt“ story, though. You’re going about your business logically, methodically, and with a clear sense of direction and purpose. You’re making things happen now and you’ll be in the lead when 2011 rolls around.

For the rest of us, there are many things we could be doing to make great strides forward in the coming year. Among them are implementing or refining the following key procedures:

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The financial transactions of any accounting system can be grouped into four major accounting cycles: Revenue, Purchase, Payroll, and General Journal.

Four Main Accounting Cycles

Accounting transactions in the form of sales invoices, receipts, purchase invoices, checks, and payroll entries are posted to the appropriate journals. Simultaneously — as a form of internal control — these postings are recorded in the general ledger, or “GL”. The GL accumulates all transaction activity, where it is organized by account class.

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How familiar are you with the accounting rules and concepts utilized by accounting software systems?  If you were more confident with the information generated by your accounting program, would it help you to use it more effectively to run your company?  More importantly, do you understand how your Accounting Policies and Procedures integrate with the accounting rules and concepts to produce the internal controls you need?

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Small public companies like yours may finally have to begin providing the Securities and Exchange Commission (SEC) with certified assessments of their internal controls.  Smaller micro caps will be required to comply with SOX 404(b) reporting requirements beginning June 15, 2010; they’ll have to attest to the effectiveness of their internal controls in their annual reports released on or after June 15 of next year.  So, for those whose annual reports are just seven months away, the time to consider is over — it’s time to take action!

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Over the last four weeks, we have focused our discussion on process maps. We’ve tried to answer some of the most common questions about process maps by taking a look at seven different types of process maps and how they’re used to describe processes.  A process is a structured set of activities that transforms inputs into outputs, but the way we describe a process may vary dramatically, from a text-based procedure to different forms of process maps.

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You have probably heard of the term “Process Map” or a process flow chart (the terms process map and process flow chart are used interchangeably) to describe a process. But what exactly is a process map anyway? Are there different types of process maps? Are all process maps created equal? We’ll try to answer some of these questions by taking a look at seven different types of process maps and how they are used to describe a process. After all, the foundation of all businesses is a common set of core processes.

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Lean approach simplifies the ISO 9001:2008 quality procedures manual and clearly points out the required QMS procedures and records.

St. Louis, MO – June 18, 2009 – Bizmanualz, Inc., a business publications, training, and consulting company based in St. Louis, MO, today announced the release of the updated ISO 9001 Policies and Procedures Manual. The company has greatly improved its product by modeling its policies and procedures on the Deming (“Plan-Do-Check-Act”) Cycle.

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Historically, compliance has been the focus of most knowledge management systems.  Documenting business processes with policies and procedures is required by many standards such as for ISO 9000 Quality Management Systems, Sarbanes Oxley Accounting and Finance, or Good Manufacturing Practices (GMP) for the Food and Drug Administration (FDA).  But if we look closer at the intent of these standards then we see that we should be more concerned with control, to improve quality or reduce the risk of failure.

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