Introduction
When you’re running a small finance team, taking shortcuts can be tempting. Sometimes that means one person handling a stack of different tasks—paying bills, collecting payments, and closing the books all on their own. That’s just everyday reality for many small businesses and start-ups.
But even if your whole finance “department” fits around a single coffee table, you still need solid internal controls. Mistakes, fraud, or compliance slip-ups can hit hard when you’ve got fewer hands on deck. Good controls aren’t about bureaucracy—they’re about making sure your numbers are right and your money’s safe, even if just two or three people are involved.
Understanding Internal Controls
So what exactly are internal controls? In short, these are systems and processes put in place to make sure money is handled correctly, information stays reliable, and rules are followed. It’s not just fancy accounting talk.
Think of internal controls as the checks and balances in day-to-day business. For a small team, it could be something as simple as having a second person look over the bank statement once a month. The main goal is to reduce mistakes and catch problems before they snowball.
Common components of internal controls include ways to monitor cash, record transactions, protect assets, and track who does what. When these controls work well, even a tiny team can spot issues early and fix them fast.
Identifying Key Areas for Internal Controls
Most small teams have a few financial hotspots where things can go sideways fast. The first is cash management—how money comes in, gets spent, and flows through your accounts. Simple errors here can really sting.
Next up is financial reporting accuracy. If you’re preparing reports for a board, external investors, or just for your own planning, you need to know those numbers aren’t off. Getting details wrong because of copy-paste errors, missed invoices, or unapproved spending can lead to much bigger headaches down the line.
Regulatory compliance is another big one. Whether it’s tax forms, payroll laws, or industry-specific requirements, forgetting to follow the rules can lead to fines or legal trouble. Controls help you keep up, so nothing falls between the cracks.
Developing Clear Financial Policies
Big companies talk a lot about policies, but even if you’ve only got two people in finance, written procedures help everyone work the same way. If someone is out sick—or leaves entirely—the next person shouldn’t be guessing what to do.
Start by documenting plain-language steps for things like expense approvals, deposits, and payroll. These don’t have to read like a policy manual. Even a shared Google Doc can work if it gets the point across.
Then, talk through the procedures together. Make sure the whole team knows where the documents are and can ask questions if something isn’t clear. The more openly you talk about procedures, the less likely you’ll be caught off guard by confusion or turnover.
Segregation of Duties
One of the classic internal control ideas is the “segregation of duties.” That just means different people should handle different parts of big tasks, like collecting funds and approving payments. The old rule is: never let one person have complete control over any single process.
Of course, this gets tricky with just two or three people. But there are still ways to add checks and balances. For instance, if one person enters vendor bills, someone else could review payment runs. If you can’t split up every job, at least build in regular oversight—like a manager or business owner reviewing monthly bank statements or transaction reports.
Outsourcing some tasks, like payroll or bookkeeping, is another way to separate responsibilities when you’re stretched thin.
Implementing Technology Solutions
Software doesn’t solve everything, but the right tools can simplify a lot. Cloud-based accounting platforms like Xero, QuickBooks Online, or FreshBooks let you set up approval workflows so nobody’s making big payments without another pair of eyes. Plus, you get an audit trail—so you always know who did what, and when.
These tools can also automate stuff that’s easy to mess up, like recurring payments, bank reconciliations, or invoice reminders. If your team is buried in spreadsheets, moving to something purpose-built for accounting makes mistakes less likely.
Spend management tools like Expensify or Ramp help track employee expenses and make sure nothing slips through unreviewed. The bonus: you save time and headaches chasing paper receipts.
Conducting Regular Audits and Reviews
Even if you trust your team completely, it’s smart to do regular checkups. This isn’t about finger-pointing; it’s just about being sure everything is working as planned. Scheduling simple monthly or quarterly reviews of transactions, approvals, and account balances gives you the chance to catch errors before they cause trouble.
In some cases, you might want to bring in an outside pro—like a part-time controller or freelance accountant—for a second opinion. But even two-person teams can trade off reviewing each other’s work. What matters is having a routine way to spot issues, talk about what went wrong, and adjust so it doesn’t happen next time.
Feedback in these reviews should be honest but constructive. If something keeps going wrong, dig into the root cause together, not just the symptoms.
Building a Culture of Accountability
This is where the softer skills come in. Internal controls aren’t just paperwork—they’re a mindset. Everyone on the team should know, deep down, they’re expected to do things the right way and call out mistakes fast.
Encouraging people to own their work, double-check details, and ask questions without fear is huge. When errors are found, fix them, and focus on learning, not blaming. Over time, this approach catches more issues before they grow and builds trust inside the team.
Setting aside a few minutes each week to check in about what’s going right (and not-so-right) can help keep everyone honest and tuned in.
Training and Education
It’s not just about tools and checklists. Everyone, even small finance teams, needs some ongoing learning. Accounting rules, tax laws, and even your own business processes all evolve. If your team isn’t keeping up, it’s easy to miss something important.
Online courses from places like Coursera, LinkedIn Learning, or even free YouTube tutorials can help sharpen the basics. Local small business organizations often offer lunch-and-learns or webinars about common financial controls and compliance.
The point isn’t perfection, but progress. Even a one-hour training session every couple of months can give everyone new ideas and make sure controls don’t get stale.
Don’t Go It Alone
If you’re feeling underwater, ask for help. There’s a growing community of finance leaders who know exactly what it’s like to juggle control with trust on a lean team.
You’ll find online forums and groups, and sometimes your accounting software has user communities or knowledge bases for small business control issues. If you’re interested, sites like this resource for small finance teams share tips that go beyond the basics.
Talking to others can spark ideas you might never come up with on your own. Sometimes something as simple as a checklist or a template from another organization can make a big difference.
Conclusion
Small finance teams wrestle with some unique control problems. The right internal controls keep you safe without slowing you down too much. Start with clear procedures, split up responsibilities wherever you can, and use software to keep things organized.
Build a habit of double-checking and stay open to learning new tricks as your business grows. There’s no single “right way” to handle internal controls, but having honest conversations and checking in regularly helps avoid surprises. Most importantly, keep the control system evolving as your team and your business change.
There’s no magic fix, but simple, thoughtful steps make all the difference. As small firms face tighter regulations and tougher competition, staying organized and careful with finance helps everything else run smoother—even when the whole team fits at one tiny table.