In the early stage of a business, informal controls often work because the founder is close to everything. The founder approves payments, knows every customer and checks the bank account daily.
As the business grows, that model breaks.
Growth changes the risk profile
More employees, more customers, more suppliers and more transactions mean more room for error. What worked at AED 2 million revenue may not work at AED 20 million.
A growing organisation needs controls that match its size and risk. This does not mean creating bureaucracy. It means designing clear rules for the areas where mistakes or misuse can hurt the business.
Start with the finance process
The most important control areas are usually customer onboarding and credit approval, sales contracts and discount approvals, invoicing and revenue recognition, supplier onboarding, purchase approvals, payment processing, payroll changes, bank reconciliations, month-end close and tax filing support.
Use approval limits
Approval limits should be clear. For example, department heads may approve expenses up to a set amount, the CEO may approve larger payments and shareholder approval may be required for major commitments.
Scenario: A manager signs a 12-month supplier contract with automatic renewal because there is no approval policy. The cost is not huge monthly, but the annual commitment is material. A basic approval matrix would have flagged the contract before signature.
Review reports, not just transactions
Controls should not only happen before payment. Management should review monthly margin reports, receivables ageing, supplier ageing, payroll changes, credit notes and unusual journal entries.
Document the process
If a control is not documented, it is hard to enforce. Simple policies are enough: who approves what, what evidence is needed and how exceptions are handled.
Practical takeaway: Financial controls should grow with the business. The right controls protect cash, improve reporting, reduce audit issues and make the company easier to manage. Strong controls are not a sign that management does not trust people. They are a sign that the business is becoming more mature.
