Your first step is to review the controls you have presently in place. Are they
sufficient to control the expansion phase as well as the expanded version of your
You may ask "How do I know for sure?"
The answers to the following questions will determine your status:
Can you get an up-to-date financial snapshot of your company? If you have to
wait until the end of the month or, even worse, the end of the quarter, the
answer is NO.
Do you have procedures in place to control purchasing of supplies (including
inventory) and services?
Have you made a budget, by department, for the costs involved in your expansion?
This one is often missed. Have you made a Critical Path Map for your
expansion? A good CPM will allow you to allocate money and personnel at the
right time. It will also alert you to potential bottle-necks so that you can
adjust your allocations to correct them.
If you can answer "Yes" to all of the above, your expansion will probably
If you need help to fine tune your controls, do it before you try to expand
not during or after.
Beware of people who call Computer Systems - Management Information Systems.
I have been programming financial software for businesses for over 35 years
and I believe that Computer Systems are EISs (Employee Information Systems).
Let me show you why.
Let's suppose, in your role as upper management, you decide to see who is
overdue in your Accounts Receivable System.
You bring that report up on your screen and see that XYZ Company is past due
on a $500,000.00 invoice by a week. You immediately reach for the phone to call
them and get that money in.
Meanwhile, you are unaware that the Accounts Receivable Clerk has just got
the cheque on their desk due to the fact that it got lost in the mailing system.
They are just about to post it to the system.
Can you imagine your embarrassment after you are finished playing "hard-ball"
with your client?
Management should receive their information from well informed employees.
The better approach to the above situation is for you to ask the Accounts
Payable Clerk for a list of Past due accounts.
The list would be delivered with the note that "This cheque has been received"
and "This client is questioning the invoice" etc. This would save you a lot of
embarrassing moments and upset clients.
Good luck with your expansion.
Feel free to contact me at 705-646-1076 or by E-mail.