What Are the Control Systems of a Business?

by John Landers; Updated September 26, 2017
Control systems contribute to the success of businesses.

Business control systems consist of procedures and processes, which help an organization achieve its mission and objectives. Controls define how employees should conduct themselves and perform job duties. After business owners and managers implement standards, they must track and monitor performance. Systems require ongoing modifications and adjustments to help reach targets.

Document Control

Most businesses have controls that assure standardized documents, such as guides, specifications, work instructions or policies and procedures. Document control procedures usually include a master list of documents. All documents must receive approval before use. The approval process may include naming the document, assigning a control number and a date. Typically, documents must undergo approval before use, identified with dates and given control and revision numbers. Revisions must also receive authorization. Some control procedures may also include a method of distribution and assign responsibilities for updating documents.

Marketing

The marketing function develops a plan and establishes marketing objectives. Typically, the schemes include controls to measure, monitor and regulate marketing campaigns and related activities. Targets or performance objectives cover a wide variety of standards, such as sales volume, market share and profits. Management employs a range of reports to track progress and make comparisons, including variance analysis or expenses-to-sales analysis. Sale control mechanisms include budgets, sale quotas, credit criteria and sales force automation.

Video of the Day

Brought to you by Techwalla
Brought to you by Techwalla

Financial Controls

Companies use financial reports, such as income statements, balance sheets and cash flow statements, to form the core of financial control systems. Balance sheets help business owners and managers determine the financial strength -- business liabilities and assets -- at a specific point. This report can help owners determine if a firm has the resources to grow or survive during economic downturns. Income statements, or profit and loss statements, track revenues and costs over a particular duration. Managers can review itemized expenses to identify items out of line with the budget, or increase the budget as warranted. Cash flow statements provide a business with projections of revenue and costs for each month over, at minimum, a 12-month period. This statement helps keep a business on track to meet it income targets

Human Resources

The human resource aspect of businesses must focus on systems for hiring, training and recruiting staff. Controls also extend to the development and management of existing employees. Businesses require techniques for assessing employees' skills, and assuring the business has staff with the necessary skills and abilities to move the organization toward its objectives. HR must also put in place workplace rules and policies that keep the business in compliance with union contracts, safety regulations and labor laws.

Quality Control

Business must have quality control, or QC, procedures in place to review and check the quality of materials, products or service. The QC procedures depend on the function. For example, the manufacturing process may require controls at specific phases, such as pre-production, during production and the finished product. The manager will need to determine what quality assurance methods to use. Business owners may use statistical techniques to ascertain the quality of raw material on arrival to the plant, or may perform visual inspections of finished products.

About the Author

John Landers has a bachelor's degree in business administration. He worked several years as a senior manager in the housing industry before pursuing his passion to become a writer. He has researched and written articles on a wide variety of interesting subjects for an array of clients. He loves penning pieces on subjects related to business, health, law and technology.

Photo Credits

  • Jupiterimages/Comstock/Getty Images
Cite this Article A tool to create a citation to reference this article Cite this Article