Rodney Rice //August 29, 2014//
According to the Association of Certified Fraud Examiners, businesses lose five percent of their revenue each year to fraud. Whether your business is big or small, it is important to be active and vigilant to protect your financial resources. The implementation of internal controls can help you manage resources and make sure your operations are efficient and effective.
To protect your business from potential fraud, there are many aspects of internal controls to consider, including how you manage cash receipts, checks, electronic transfers, and invoices. Your bank or financial institution can help, and there are some strategies that should be considered by you as a business owner and your senior executives. What you say about these controls, and the actions you take, will help to develop and emphasize a company culture that values ethical financial management. Below are additional details to help you review and strengthen internal controls to help minimize the potential for fraud at your business.
Controlling Cash Receipts
Disbursement Checks
Electronic Transactions should be:
Invoices and Supporting Documents
Banks and Financial Institutions
Business Owners and Senior Executives also have a role in cash control and should regularly:
There is a lot that goes into watching your cash, but if you do it right, you’ll minimize opportunities for fraud and help develop a workplace culture that values ethical financial management. Other strategies include protecting the integrity of usernames and passwords, implementing a mandatory vacation policy, educating employees on the risks surrounding your cash cycles, and take out fidelity bond insurance on all of your employees who have access to liquid assets (such as petty cash, cash receipts, bank accounts, credit cards or credit card accounts).
Having cash controls in place can help to reinforce the integrity of internal financial information and the accuracy of financial reports provided to others. Your organization’s approach to internal controls and how much weight you give to them will help foster your employees’ attitudes and actions. What you say and what you do – the actions you take to watch your cash – can help you create a culture of ethical financial management.