Which financial processes should a growing business establish early?
Recognise which financial processes your business needs early, and how proportionate checks can protect cash, improve reporting and support growth.
10/30/20263 min read
Which financial processes should a growing business establish early?
A business needs reliable financial processes from the point it starts receiving money, paying suppliers or making commitments. The arrangements can be simple at first, but they need to develop as more people, transactions and systems become involved.
The Isle of Man Cyber Security Centre’s 2025–26 annual threat report describes a local organisation losing roughly £142,000 in an invoice scam. The investigation found no email compromise. An attacker used a lookalike domain and impersonation to exploit weak checks around payment details. The issue emerged when the genuine supplier queried missing funds.
The report does not identify the organisation as a startup. However, it illustrates an issue relevant to businesses at any stage: ordinary financial activity can expose cash to significant loss when the supporting checks are ineffective.
Why is payment approval not enough?
Authorisation establishes who has permission to make a decision. It does not, by itself, establish whether the information supporting that decision is correct.
A founder may approve a payment in good faith without knowing that the supplier’s bank details have been altered. Adding another approver may provide little protection if both people rely on the same unverified information.
Effective processes combine checks that prevent errors or fraud, reviews that detect problems and clear responsibilities for acting when something appears wrong.
Which processes deserve attention first?
The priorities depend on how the business earns income, spends money and makes commitments. Four areas are worth examining early:
Customer billing and collection: agree prices and payment terms, issue accurate invoices promptly and follow up overdue balances.
Supplier setup and payments: verify supplier information and changes to bank details, check what is being paid for and establish payment responsibilities.
Records and reconciliations: keep records current and investigate differences between accounting records, bank activity and other relevant information.
Cash and commitments: maintain visibility over expected receipts, upcoming payments and obligations such as wages, rent and supplier orders.
These processes support everyday performance as well as protection. Missed invoices delay receipts, duplicate payments consume cash and incomplete records make it harder to assess whether the business can afford its next commitment.
How do prevention and detection work together?
Consider a supplier requesting a change to its bank details.
Independent verification using a previously trusted contact number can help prevent a fraudulent change. Restricting who can amend supplier records reduces opportunities for unauthorised changes.
A review of changed details and unusual payments can identify activity requiring investigation. Bank reconciliations and supplier statement reviews can reveal discrepancies, although they may not establish that a payment reached the intended recipient.
The timing matters. A check completed after several payments have left the account may detect a problem too late to prevent further loss. Staff also need to know when to pause a payment, who to contact and how concerns will be resolved.
What is proportionate for a small team?
A startup may not have enough people to separate every responsibility. The founder may handle sales, purchasing and payments personally, with an external bookkeeper maintaining the records.
That arrangement still needs clear boundaries. Who can access the bank? Who can change supplier information? Who reviews transactions and follows up differences?
An owner review can provide useful oversight when someone else prepares the work. Where the owner performs the transaction themselves, that review provides less independence. External review, system restrictions or other safeguards may be needed, depending on the risk.
The amount at stake, sensitivity of information and speed at which losses could occur matter alongside the size of the team.
When should the arrangements change?
Review the processes when the business hires, delegates payments, introduces software, raises funding or enters a new market. These changes can alter responsibilities and expose weaknesses that were less significant before.
Staff need sufficient training, time and authority to carry out their roles. As responsibilities increase, development and remuneration should also be reviewed.
Repeated corrections, overdue reconciliations, unresolved differences and constant dependence on the founder are signs that the arrangements may need attention. Buying software will only help if the underlying responsibilities and checks are clear.
How do you know the checks work?
A documented procedure explains what should happen. Evidence of completed work, follow-up and periodic testing helps establish whether it happens in practice.
For an important check, agree who performs it, what they examine, when it must happen and how exceptions are resolved. Review whether recurring problems are reducing and whether issues are being identified early enough to act.
The aim is to establish reliable ways of working that remain useful as the business develops.
Discuss your processes and financial controls
V&E Kaiulo supports businesses with financial controls, management reporting, cash visibility and decision-making. This may involve reviewing a specific process, identifying gaps or supporting agreed improvements.
We agree the scope, responsibilities, timetable and fee before work begins, working alongside existing advisers and internal teams where appropriate.
If the same errors keep returning, important checks depend on you, or you are unsure whether your controls work in practice, contact hello@vandekaiulo.com to discuss where support would be useful.