We’ve seen it a lot in our 30+ years working with contractors— a key person has a medical event or an extended medical leave; the controller is caught re-routing funds to their personal account and is immediately fired; the primary accounting person walks out.
Most construction companies run a tight back office. They’re efficient and usually have little cross-over training. So how do you protect yourself? You could hire two of every role, but that’s not financially feasible. When it comes to cross training existing staff across duties, not everyone on the team has the same skill level, no matter how much training you provide. Then, many professional services want you to have ‘separation of duties,’ but there just aren’t enough hands to go around.
So, what are the options?
1. Owners should do their own bank reconciliation. It’s not hard, and you get a high-level view of what’s happening with your money. Don’t know how? We can show you. If this is just not possible for you, hire an outside company to do these, someone you trust. We actually perform this service for quite a few of our clients. This meets the ‘separation of duties’ guideline while protecting your controller.
2. Where’s your procedure book? Is it collecting dust? Assuming you have one, is it current? Could you follow those steps, know where to log on, and know the due dates if you pulled it out and worked through it? If you can’t say ‘yes’ to these questions, make a commitment to get these updated this winter. Then set a reminder for a bi-annual or annual review of the book.
3. Don’t have a procedure book? You can start one today! Every week, maybe on Fridays, ask your staff for just one procedure. Where to start? What are the most critical functions? Payroll is usually a good place to start and there will be several procedures covering this process. Then move to billing, AP, and so on.
Be methodical—your company’s well-being (and therefore your well-being) is on the line! – CMW