Why Are Internal Controls Important?

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Internal controls are important in business for setting up a system of boundaries that will benefit the basic framework of a business. Set up internal business controls, such as budgets and investing principles, with help from a registered financial consultant in this free video on money management.

Part of the Video Series: Money Management & Personal Finance
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Video Transcript

This is financial adviser Patrick Munro talking about, "Why are internal controls important?" Having internal controls in a business or even in your personal life are important because it allows a system of boundaries that you can set up that benefits you in having a basic framework on which you can work with. Rules are important to society in general, but they're also important when you're running a business and financial life too. Make sure you set up a budget and the budget should have a system in place that you construct that will allow you to have a firm focus on where you're spending your money. Make sure you pay yourself first as an internal control and keep your risk coefficient down when it comes to investing so that you don't lose your principal going forward as well. These are important internal controls that you have to place on your life and as your life grows in complexity, make sure your internal controls are flexible to accommodate that change.

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