Several financial safeguards can be implemented to protect an organization's financial health. These include:
1. Segregation of Duties: This involves dividing responsibilities among different employees to reduce the risk of error or fraud. For example, the person responsible for authorizing payments should not be the same person who processes them. 2. Internal Audits: Regular internal audits help identify and address potential issues before they escalate. Audits provide an objective assessment of financial practices and ensure compliance with policies. 3. Financial Controls: Establishing robust financial controls, such as approval hierarchies and spending limits, helps manage expenditures and prevent unauthorized transactions. 4. Insurance: Obtaining appropriate insurance coverage can protect the business from financial losses due to unforeseen events, such as natural disasters or cyberattacks. 5. Compliance Programs: Implementing comprehensive compliance programs ensures adherence to legal and regulatory requirements, reducing the risk of penalties and reputational damage.