Playbook / Lessons / The system runs: operating cadence
StartupsPut simple financial controls in place before you scale
Cummings notes that a growing startup inevitably adds processes, and financial controls are one area to put in place sooner rather than later. Tracking everything is easy with five people but does not scale to fifty. His examples include requiring two signatures on checks over a set amount, a modest limit on corporate credit cards except one for larger purchases, separating accounts receivable from the person who deposits checks, and an annual review of the books by a CPA.
“Financial controls are important for startups and should be implemented early on.”— David Cummings, Financial Controls for Startups, Dec 2011
Do this
Set a spending limit on company cards and a second-signature rule for large payments, and write both down this week.