The second part of our Safeguarding Cash series concentrates on how cash leaves an organization’s bank accounts. I find it necessary to stress here, once again, how important cash is to any business, non-profit organization, and public institution. Cash is the single most important asset, which is why safeguarding it should be of the utmost importance to any organization’s leadership. The following list provides some details on how to safeguard outbound cash:
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Require that all disbursements from bank accounts are made on pre-numbered checks
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Preserve and file all voided checks, and confirm that all voided checks are marked “VOID”
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Do not make checks out to “Cash”
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Never sign checks in advance
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Before a check is signed, require that the person who signs your organization’s checks review supporting documentation of expenses and all approvals before signing
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Require that requests for reimbursement be checked for mathematical accuracy and reasonableness before approval
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Require that bank statements and canceled checks be received and reviewed by a person who is independent of the accounting department/function
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Mark paid invoices as “Paid” and attach a copy of the check to the invoice prior to filing
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Require that unpaid invoices be maintained in an unpaid invoice file, and create and maintain a report of unpaid invoices to be reviewed and updated on a consistent basis
Cash, when leaving an organization, must always be safeguarded against loss. This is done through consistency in execution and by managing the processes through which outbound cash is reviewed, approved, and traced. At Rainey Accounting, our mission is to partner with businesses, non-profit organizations, and public institutions, providing peace of mind and assurance in cash management so they can concentrate on daily operations and future plans. Contact Rainey Accounting today for a free consultation.
