I run a one‑person business and, like many solo entrepreneurs, I used to think internal controls were only for larger companies with finance teams. Over time I learned the hard way that even tiny operations can be vulnerable to simple mistakes and, occasionally, to fraud. The good news is that basic internal controls are practical, low‑cost and easy to implement — even when you’re the only person wearing every hat.
Below I’ll walk you through common risks for one‑person businesses and the straightforward controls I’ve adopted with my clients to reduce those risks. I’ll share tools, processes and simple checklists you can start using today without a big budget or complicated policies.
Why internal controls matter for a solo business
When you’re the business owner, bookkeeper and bank signatory all at once, a single mistake can affect cashflow, trigger tax headaches or mask fraudulent activity. Controls help you:
Catch errors early (wrong tax codes, duplicated invoices)Protect cash (unauthorised payments, incorrect refunds)Keep records audit‑ready for HMRCFree up mental bandwidth by creating repeatable routinesThink of controls as simple guardrails: they don’t need to be bureaucratic, just targeted and consistent.
Core controls every one‑person business should set up
Below are practical controls I use and recommend. You can implement most of them in a day or two.
Segregation of duties — even when it’s just you
True segregation isn’t possible alone, but you can simulate it by separating responsibilities over time and using technology. For example:
Use cloud accounting software (Xero, QuickBooks Online, FreeAgent) for invoicing and reconciliations. Don’t make manual edits directly in bank statements — record transactions in the accounting system and let bank feeds import the raw data.Schedule a weekly “finance hour” where you only review bank transactions and reconcile them. Treat it like a second pair of eyes, and make notes for anything unusual.For significant decisions (e.g., large vendor payments), get a second opinion — a trusted adviser, accountant or even a business friend — before pressing “pay.”Authorization and payment controls
Controls around payments are critical because cash is the most attractive target. Practical steps:
Set payment thresholds in your accounting software or banking app — flag or require manual review for payments above a certain amount (for me that’s any payment over £500).Use separate business debit/credit cards for subscriptions and supplier payments. Avoid using personal cards for business expenses.Prefer automated, trackable payment methods like direct debit via GoCardless, or card payments through Stripe/PayPal. They leave an electronic trail that’s easier to reconcile than cash.Reconciliations and reviews
Frequent reconciliations are your best defense against both mistakes and fraud. I recommend:
Daily bank feed checks for unusual transactions (if that’s realistic for your business) and a weekly reconciliation for most micro businesses.Monthly reconciliations of sales, VAT and bank accounts so you’re never more than a month out of sync. This makes quarterly VAT returns and year‑end far less stressful.Quarterly reviews of expense categories to spot duplicates, misclassifications or anomalous increases.Receipt capture and expense approvals
Missing receipts make HMRC audits painful. Use a receipt capture app and enforce simple rules:
Capture receipts immediately with apps like Dext (Receipt Bank), Receipt Bank alternatives, or even the camera function in Xero/QuickBooks mobile apps.Match the receipt to the bank transaction within 7 days. If a receipt is missing, create a clear note explaining the situation (who, what, why).Keep petty cash minimal. If you do use cash, record every cash transaction in a petty cash log and reconcile it weekly.Access controls and passwords
Protecting digital access is as important as protecting physical cash.
Use a password manager (1Password, LastPass, Bitwarden) to generate and store strong, unique passwords.Enable two‑factor authentication (2FA) on bank accounts, accounting software and payment platforms.Limit the number of people with access to accounts — this includes advisors who don’t need full permissions. Most cloud accounting systems let you set user roles and restrict functions like bank reconciliation or payroll.Backup and documentation
Make documentation part of your routine so you can prove decisions and fix errors quickly.
Export and back up key reports monthly (bank reconciliation report, profit & loss, VAT returns). Store copies on cloud storage (Google Drive, Dropbox) and locally.Keep a simple SOP (standard operating procedure) file for critical processes — how you raise invoices, approve refunds, reconcile bank accounts and prepare VAT returns. Even a one‑page checklist helps maintain consistency.Monitoring and exception reporting
Set up a short list of financial “watch items” you check regularly. I use a one‑page monthly control checklist — you can adapt the table below:
| Control | Frequency | Action if exception found |
| Bank reconciliation complete | Weekly/Monthly | Investigate unmatched items; contact bank if necessary |
| High value payments (>£500) | Ongoing | Require secondary review; hold payment until cleared |
| Missing receipts | Weekly | Follow up with supplier or record a clear explanation |
| Unusual bank account changes | Weekly | Confirm with bank and change passwords/2FA if needed |
Responding to suspected fraud or errors
If you spot something worrying, act quickly and calmly:
Freeze payments and change passwords immediately.Export transaction reports and save copies as evidence.Contact your bank to dispute unauthorised transactions and ask about a speedy resolution.Notify your accountant — even if you don’t use one regularly, many will help with an initial investigation and advice to HMRC if needed.Small investments that deliver big returns
Here are a few low‑cost tools and habits that consistently improve control quality:
Xero or QuickBooks Online for bank feeds and a clear audit trail.Receipt capture like Dext or the built‑in camera in accounting apps.Paying suppliers via scheduled BACS through your business bank to reduce ad‑hoc manual transfers.A short monthly meeting with an accountant or mentor to review your control checklist and financials — even 30 minutes can uncover issues early.Implementing internal controls as a solo founder doesn’t need to be onerous. Focus on clear processes, regular reconciliations and the right tools. Those small habits will protect your cash, simplify compliance and give you the time and confidence to grow your business. If you’d like a downloadable one‑page checklist or a template bank reconciliation schedule I use with clients, tell me what format you prefer (Excel, Google Sheets or PDF) and I’ll prepare it for you.
