The term sounds classic and you might even feel panicky when you hear it. Control linked to finances: infinite databases, invoices, expenses, balances … However, both in the conventional business world and in the new paradigm that now opens up for many businesses with the digital age, financial controls are much simpler to use. understand, apply and automate what one can imagine.
Definition of financial controls: What are the most common and how are they implemented?
To understand what financial controls are, let’s start by providing a definition of the concept. It could be said that they are the analysis and study of the real results of an organization, taking into account the circumstances of the company and its projects, as well as its financial objectives , its programs and its plans in the short, medium and long term. . That is, they are the tools with which the development and impact of the strategies that are carried out and their influence on the general finances of a project will be evaluated.
The financial indicators or KPIs (as they are now called), with which the different financial statements are measured , will vary depending on the objectives of each plan. That is to say, these examinations of finances are a fundamental pillar for any business, since through financial reports a vision of the economic health of the company will be obtained.
What are the most common controls?
But, as the concept is very broad, one may wonder “what are the most common financial controls?”. Everything will depend on the projects to be evaluated and the moment in which each of them is located. Even so, there are three typologies that appear in every strategy:
- Balance sheet. Essential at the beginning of each project to assess at a general level the equity situation and the financial statements of the organization at the beginning of the control or audit.
- Statement of income. Summary of business operations that have been carried out in a specific period of time. It collects several different statements and is, as its name suggests, the result of subtracting the different financial expenses that have been generated from the income . With this financial control, the profitability of an operation or the general activity of the company is analyzed. It is also verified with data if the financial objectives set are being met .
- Cash flow or also called statement of flows. With this financial examination, the variations that have occurred in terms of cash and equivalents are evaluated, determining whether more liquidity is needed or not.
Obviously, for the different projects and operations that are carried out in any organization, both these and other financial control processes are established. However, these three have been and are the most common.
The importance of financial controls in any business
And we say that they have been and are essential because the arrival of the online world has not detracted from financial controls. Currently, due to their relevance for planning or when organizing cost accounting, these economic examinations are still used, but in a digitized and automated way. And why are they so important, for example, in the billing process to customers and suppliers? :
- They measure the different financial processes and economic flows, helping to know the financial health of our projects.
- They are ideal for controlling the sending of invoices: invoice workflow, receipt and acknowledgment of receipt of invoices that have been issued to the client, essential in order to control financial income and expenses .
- They are used to measure the invoice issuance processes, the financial risks in them and a subsequent and consequent optimization of these processes.
- They offer informational transparency, both internally and for customers.
- Early detection of incidents, such as in the easyap provider portal where the appropriate information is presented to each provider.
What has changed with the online world is the implementation of these financial processes. Little by little the notebook and the traditional pen with which financial reports were made give way to technology and its advances.
Advantages of implementing and automating financial controls in billing processes
The savings in material and time is significant thanks to such technological advances. The cost calculator reflects the savings for the company by automating billing processes to carry out financial controls more efficiently. A clear reflection of the positive of implementing and automating financial services controls is that now, with companies like Easyap, electronic invoices are issued and processed almost instantly, whereas in the past they were operations that involved multiple paperwork and, above all, weather.
Another innovation in implementing and automating these financial processes is that an event can be registered in a much more agile way. Simply, the event is recorded with a time stamp on each invoice and the project’s financial auditors will monitor its evolution on site. You can even measure the traceability of the financial statements by checking each and every one of the steps that are taken and the financial instruments with which you work.
Therefore, and by way of conclusion, it is absurd to ignore the importance of these financial processes and their automation. But it is that in this new digital era, in which the implementation of automated financial processes is key and is something that most companies already do, it is even more so. For this reason, whether working with companies specialized in financial controls such as Easyap or internally, the savings they represent in two fundamental aspects of life: time and money should be greatly appreciated.