Why ERM Matters to Your Non-Profit or Small Biz

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What internal risks is your small business or not-for-profit organization exposed to? Is this something you’ve considered or have you put this assessment on the back burner in hopes nothing major goes awry? If the latter, you’re not alone. According to a recent survey done by North Carolina State University’s Enterprise Risk Management (ERM) Initiative for the American Institute of CPAs, only 13% of not-for-profits have thorough ERM processes in place, while 52% of public companies and 43% of financial services companies surveyed have formal ERM processes (source).

What this data tells us is that risk management isn’t a priority for the majority of companies out there – even those businesses that are in the financial industry.

But shouldn’t keeping our eyes on the risks our businesses can be exposed to be top of mind? Yes, and here are some benefits of effective ERM on your non-profit or small biz:

Establishment of a Risk-Aware Culture
o “Organizations that have implemented ERM note that increasing the focus on risk at the senior levels results in more discussion of risk at all levels. The resulting cultural shift allows risk to be considered more openly and breaks down silos with respect to how risk is managed.” (source)

o How Integrity Accounting can Help: We can take an in-depth look at your existing internal financial controls and provide you with a professional opinion as to whether or not what you have in place is adequate. We will also help you and the members of your team start broadening your perspective on risk management; we will help you to see what internal risks your business or organization is exposed to. For example: if someone recorded an entry incorrectly, or perhaps they chose to steal a little bit of cash from the company cash register, we can help you ensure that these types of issues are caught.

Standardized Reporting on Risk
o “One of the major values of ERM risk reporting is improved, timeliness, conciseness, and flexibility of the risk data. This provides the data needed for improved decision-making capabilities within the executive and director levels, and in other layers of management.” (source)

o How Integrity Accounting can Help: We can perform a comprehensive risk assessment and evaluation of your company’s current control structures to pinpoint those areas of increased risk. If you have a specific facet that you would like us to zero in on, we can start there, or if you prefer a broader scope, we are prepared to perform an entity-wide assessment. We don’t just stop there; then we’ll work alongside you and your team to develop functional controls to help you reduce those risks.

More Effective & Efficient Use of Organization Resources
o “In organizations without ERM, many individuals may be involved with managing and reporting risk across operational units. While developing an ERM program does not replace the need for day-to-day risk management, it can improve the framework and tools used to perform the critical risk management functions in a consistent manner. Eliminating redundant processes improves efficiency by allocating the right amount of resources to mitigating the risk.” (source)

o How Integrity Accounting can Help: We want to ensure that we provide you and your team with the tools and skill-set to implement proper internal controls during those times when we can’t be there. We will assist in educating management and employees about proper internal controls and the things to look for that might signal a problem. We are always a phone call away, but urgent matters need to be handled immediate and in-house, and we believe that for internal controls to continue to work over the long-term, education is key.

Let the experts at Integrity Accounting help you assess your internal controls. Call us today at 505-792-9108 or submit an inquiry via our online messaging portal here.