Outsourced ControllerWho approves bills and payments in a small company
You're looking for who approves bills and payments in a small company, and you'd rather not sign off on every receipt yourself. Tax CFO Steven Palmieri has a simple answer for owner-run businesses. Set a short path once, write down who can touch the money, and look at the exceptions each month. Steven and his team build that path with you and then check that it holds. You can see where this fits in what an outsourced controller does.
Set my approval line
The two-person idea, scaled down
Large companies keep the person who enters a bill apart from the person who pays it. A small team can borrow the same idea without the paperwork. The rule is only this. The person who enters a bill shouldn't be the only person able to pay it, and the rule extends to vendor setup as well. If one person can do both, nobody else ever sees the payment until it's done.
That doesn't require a staff of ten. In a company of four, the second person can be the owner, a spouse who helps with the books, or us.
A line you set yourself
Every owner can pick a dollar amount above which they approve a payment personally. The line is yours. The right figure depends on the size of a typical bill in your business, how fast you need to pay vendors and how much you trust the team, so we work it out with you. A landscaper and a software shop will land in different places.
Below the line, your bookkeeper or manager pays routine bills. Above it, you sign off. The point is that you see the larger payments without having to see all of them.
Who can reach the bank, the cards and the apps that pay
Write the list down. Include each bank account, each business card, and every app that can send a payment. A card in a drawer and an app on a phone both belong on that list, even when nobody thinks of them as accounts. Next to each, write who has access and what kind. Then check it against reality, because the written list and the actual logins tend to drift apart as people come and go.
When someone leaves, their access goes the same week. When someone joins, their access starts small. A short list kept up to date does more for the company than a long policy nobody reads.
One look a month at three things
Once the month is closed, we look at the same three things every time. We look at new vendors added during the month. We look at any change in a vendor's bank details, since a changed account number is the quiet way money goes missing. And we look at payments that were unusual for their size or timing.
Most months, the list is short and dull. That's the sign that it's working.
What changes as the team grows
At five people, you may still approve everything above your line. At fifteen, a manager may approve within a limit and you review the totals. At fifty, the company will probably want a finance hire and a fuller set of rules. We tell you when the light version has run its course, and the same list becomes the starting point for the next one.
How this fits with the rest
Approvals are one half of the picture. The other half is making sure vendors are on file before they're paid, which bills, vendors and W-9 forms covers. Together they give you a company where money leaves only for reasons somebody can name.
On the calendar. The one recurring check this page adds is the monthly look at new vendors, changed bank details and unusual payments, done right after the books close and noted in the same file as the rest of your records.