As more businesses embrace remote and hybrid work models, one area that hasn’t shifted as quickly is internal controls. Systems that once relied on in-person oversight, paper approvals, or physical access now face gaps that can leave businesses exposed to fraud, errors, and compliance risks.
The good news? With a few intentional adjustments, you can strengthen your control environment—no matter where your team works.
Why Internal Controls Matter More Now
Internal controls aren’t just about compliance—they’re about protecting your business. They help:
- Safeguard assets from misuse or theft,
- Ensure the accuracy of financial reporting,
- Promote operational efficiency, and
- Build trust with lenders, investors, and stakeholders.
When employees work remotely, these controls can weaken if not adapted. For example:
- An employee who once had to submit expense reports with paper receipts might now upload PDFs with no secondary review.
- Password-sharing may become more common when employees work across multiple systems.
- Physical inventory checks may get skipped, leading to inaccurate reporting.
5 Practical Ways to Strengthen Controls in a Hybrid Environment
- Digitize Approvals With Audit Trails
Problem: Paper-based approval processes don’t work remotely.
Solution: Implement cloud-based systems (like Bill.com, QuickBooks Online, or NetSuite) where approvals are logged electronically. These systems create time-stamped audit trails to reduce the risk of unauthorized payments.
- Separate Duties—Even Across Locations
Problem: Remote staff may take on multiple roles out of convenience.
Solution: Keep segregation of duties intact. For example, the person entering vendor invoices should not also approve or pay them. Even in small businesses, you can create compensating controls—like having an owner or manager review a monthly vendor payment report.
- Strengthen IT and Access Controls
Problem: Employees working from home often use personal devices or unsecured networks.
Solution: Require strong password protocols, two-factor authentication, and company-approved devices or VPN access. Limit user access so employees only see the systems and data necessary for their role.
- Update Physical Safeguards for a Virtual World
Problem: Physical checks and balances—like cash counts or warehouse walk-throughs—are harder with remote teams.
Solution: Use video calls for inventory counts, request photos or live walkthroughs, and reconcile system reports to physical counts more frequently. For example, a distribution company may require supervisors to perform a quarterly virtual inventory audit to ensure accuracy.
- Increase Oversight and Communication
Problem: Reduced face-to-face interaction can lower accountability.
Solution: Build regular review into your routine. Examples include:
- Monthly virtual meetings to review bank reconciliations,
- Quarterly internal control check-ins with your CPA,
- Dashboards for real-time financial and operational metrics.
The more you embed oversight into daily workflows, the less chance for errors or fraud to go unnoticed.
Plan today to avoid costly surprises tomorrow
Remote and hybrid work are here to stay, and your internal controls should evolve alongside them. By digitizing processes, keeping roles clearly separated, and strengthening IT safeguards, you can protect your business while giving your team the flexibility they need.
Your CPA can help you assess gaps, design practical control updates, and even test them to make sure they’re working effectively. Our Internal Controls Checklist can help you stay on track. If you have questions about internal controls, leave a comment below or feel free to contact me directly. I’m happy to help!
