Transparency in business is more than a mantra, it’s essential. As long as people are people, there will be those who don’t keep integrity as their model and one rogue employee can significantly damage an entire company. Whether your company has one person or many responsible for purchasing, the potential for kickbacks and other unethical behavior is present.
Our approach to proactively manage these risks has included a couple of distinct methods. We recommend a strict purchasing protocol, which will be dependent on your company’s business model. Every company has different needs, but as you grow it will become impossible to keep tabs on everybody. Reporting mechanisms and purchasing protocols that require purchasers to justify their decisions in writing both quantitatively and qualitatively can provide the accountability and transparency needed. This allows for great management oversight. But even with these reporting structures, there’s always a way to game the system.
To target the broader behavior, we often recommend an anti-kickback policy. The policy should be updated from time to time, and released companywide on a regular basis. Regular reminders are necessary to ensure that everybody knows the seriousness with which the company takes these matters. Take things a step further and require your employees to sign the policy anew whenever it is updated. Ensuring integrity within your ranks will create long-term value.
About Gateway CFO Solutions, LLC:
Based in St. Louis, Gateway CFO Solutions helps small businesses grow profits and revenues, and bring peace of mind to their company’s financial picture through part-time CFO services. Many small business owners are without a trusted advisor for the financial side of their business, and they have seemingly few resources to turn to for expert guidance. We provide that guidance and act as a trusted, strategic advisor for our clients. We provide both broad, global planning and “roll up the sleeves” technical services.