News & Updates

Internal Financial Controls: Getting the Basics Right as You Grow

As businesses grow, financial controls can no longer rely on trust, habit, or one key person knowing where everything is. Growth brings complexity, and complexity demands structure.

The starting point is strong foundations. Separate responsibilities wherever possible, ensure supplier payments are properly authorised, reconcile bank accounts regularly, and maintain accurate management accounts. Cash flow forecasting should become a routine discipline rather than an occasional exercise.

As turnover increases, so do the risks. More employees, more suppliers, and larger transactions require stronger controls. Purchase order processes, delegated spending limits, documented financial procedures, and regular balance sheet reviews help prevent errors and identify issues before they become expensive problems.

As organisations become larger and more complex, internal controls should evolve from basic protection to strategic oversight. Leadership teams and boards need reliable financial information, meaningful key performance indicators, and clear accountability. Periodic internal audits, system-based approval workflows, and robust cyber security measures around finance functions become increasingly important.

The most successful businesses stay ahead of growth by building processes that are appropriate for the next stage, not the last one.

Good internal controls provide confidence: confidence in the numbers, confidence in decision-making, and confidence that the business can continue to grow without unnecessary financial risk.

Not All Revenue Is Equal

During a recent event with the Chamber of Commerce, I was invited to consider the 2026/27 manifesto. We were asked to consider the theme of ‘Profit & Revenue’ and, as someone who has worked as an accountant and business advisor for more than 20 years, it was a topic I was particularly interested in.

A well-known phrase immediately came to mind: “revenue is vanity, profit is sanity.”

Earlier in my career I worked with a multinational wine business, reporting into a highly experienced Finance Director who had spent most of his career in the wine trade. I had previously been his auditor and remember asking detailed questions about changes in revenue. His response was always to steer the conversation away from the top line and back to what really mattered — the bottom line.

It’s easy for businesses to focus on driving revenue, but when margins are tight this can result in becoming what I often call “busy fools” — increasing turnover without improving the overall financial health of the business.

When business owners shift their focus to profit, they tend to become far more intentional about the work they take on. Not all revenue is equal.

Understanding profit also means looking beyond the obvious direct costs. Growth may require a larger team, additional space, or investment in equipment and infrastructure. Until the full cost base is clear, the true profitability of that revenue cannot be fully understood.

By all means pursue growth — but always keep one eye firmly on profitability. Because no business benefits from being busy without being profitable.

https://hwchamber.co.uk/not-all-revenue-is-equal/

Pension Contributions

Many employers don’t realise that choosing a Salary Sacrifice pension scheme can save both the business and its employees a significant amount of National Insurance.

For example, if an employee contributes £2,000 a year into their pension, a Salary Sacrifice arrangement could save the business around £300 and the employee around £160. Multiply that across every employee… and every year… and the numbers get big very quickly.

When using a scheme which deducts pension contributions after tax, such as a Net Pay or Relief at Source scheme, we often find that employees don’t realise they’re missing out on extra tax relief.

If you earn over £50,000 and your employer doesn’t use Salary Sacrifice, you may be due a tax refund — especially if you make personal pension contributions.

A £2,000 contribution could mean £400 back in tax relief.

And a quick heads up:
From April 2029, the rules are set to change. Only the first £2,000 of salary sacrificed pension contributions each year will remain exempt from National Insurance. Anything above that will attract NI for both employer and employee. It doesn’t affect current arrangements, but it’s worth planning ahead.

As always, proper advice makes all the difference, and if you’d like help understanding your options, get in touch.

Introducing Worcestershire Growth Hub

Starting a new business can feel really daunting. There’s so much to think about, and it often feels like you’re spinning many plates at once.

The Worcestershire Growth Hub (and other Growth Hubs throughout the country) can offer access to training, grants, and general business support.

And this isn’t just for new businesses either – they also support existing businesses that are looking to grow.