Early in my career, long before I launched Alchemy, an employee stole $20,000 from me. It was a shocking experience, and I felt betrayed. It took years to emotionally recover. At first, I swung the pendulum way back toward control and felt uncomfortable outsourcing anything financial. As I grew, that became completely unsustainable, and I was left wondering, what was the right balance between delegation and oversight?
Today, my world is significantly bigger and more complex, and I make it a point to delegate all but things I’m uniquely gifted at or need to manage as the owner. When it comes to financial matters, I take a very particular approach to ensure security, finding a balance between control and not letting things get bogged down in my inbox.
Here are the three things I do that make the biggest difference…
3 – I review all transactions in all bank accounts daily.
Usually, first thing in the morning, I will open my bank app and review all the transactions over the last 24 hours in all bank accounts. At first, there were a lot of transactions I didn’t recognize, but the more I did this and asked questions, the easier it became for me to spot anomalies. Now, it takes me 5 minutes, and maybe once a week, I will email my team asking about a transaction I don’t recognize. This 5-minute daily review not only keeps me intimately aware of my finances but also helps me spot problems immediately. This could be done weekly, but I find that somewhat overwhelming because there are too many transactions to see on a weekly basis.
2 – I receive an email for all credit card transactions over $50.
This falls into the category of inspecting what you expect. I have a lot of employees with access to credit cards, and seeing what they are using the credit card for helps me better understand the field expenses. Once in a while, a credit card is compromised at no fault of the employee, and if the credit card company doesn’t catch it, it’s easy for me to see because the spending is suddenly out of pattern. This results in about 10-20 extra emails a day, which is not a problem for me, but if you’re overwhelmed by emails, you might set that threshold higher or have this be a weekly review. My team jokes that I always know where everyone is based on their credit card charges. It’s a little big brother, but it helps me sleep better at night.
1 – My finance team has accountant-level access to bank accounts.
Most banks allow you to set different permission levels for different people on the team. Accountants usually only need view/read access. My team can see transactions and pull statements to do the accounting work but cannot send money out of my account without my additional authorization. On a weekly basis, my bookkeeping team sets up the bills to be paid via online banking, and then I go in with my access ID and approve the ACHs. This takes me 2-10 minutes, depending on how busy the week is. I am the only one authorized to send wires, which happens only 2-3 times a year.
BONUS: The next evolution will be delegating bill pay oversight and the daily transaction review to a team member with full companywide budget responsibility. When that happens, I will set up two accounts: an income account and an operating account. Each month, the monthly budget will be transferred from the income account to the operating account. The operating account will be managed by the team member, the income account will be handled by me, and I will move from a daily review to a weekly review to eventually a monthly review.
The right formula of oversight for you depends on the stage and health of the business (i.e., newer, more volatile requires more owner control), who is on your team, and their capacities for financial matters. There is no one-size-fits-all here, and as you grow, the protocol will need to change and adapt to your needs. Don’t let your desire for control or a bad experience get in the way of evolving this area of your world.
