What Is Financial Leakage and How to Prevent It in Your Business
Introduction From overseeing spending and running the business to managing its many subdivisions, companies seem to have an endless to-do list. However, analysis implies that many companies do not suffer losses due to theft or fraud- rather, their only loss comes through unnoticed inefficiencies (financial leakage). Without sound financial controls, these leaks can accumulate which can be stress inducing for the company’s resources. In this regard, Managing Financial Leakage becomes vital. It aids firms in spotting, controlling, and eliminating the many ways money inadvertently drains from their processes. What is Financial Leakage? Lack of defined procedures, uncompleted tasks, errors, outdated techniques, and simple lack of supervision all contribute towards a system's unintentional loss of funds (financial leakage). Unlike fraud, this is financial negligence that stems from carelessness, outdated practices, or inefficiency. Some examples that come to mind include paying for lic...
