Does the accounting department in your business handle all the transactions, including payment of bills? Do you ever ask yourself, "How can I be confident that accounting improprieties are not occurring in my business? How do I monitor my accounting staff? How do I know if I'm being taken advantage of?" If so, this article will answer those questions.
Unless it is a cash-type business, generally issues occur in the expense area. In order to ensure improprieties are less likely to occur, key internal controls should be established, such as:
- Do not allow employees un-monitored access to cash accounts: you sign all checks.
- Dual signatures can be required on all checks. This is used in small governmental entities and non-profits.
- Have the bank statements sent directly to you, not the accounting department. Review checks and ACH transfers for appropriateness.
- Request that your bank send email notifications to you for ACH payments and bank account transfers.
- Require accounting department to reconcile accounts monthly, preferably by someone not recording or processing transactions.
- Require and review your monthly financial statements for unexpected variances and unusual balances.
The bottom line is to have oversight procedures in place and a “tone-at-the-top” that procedures are to be followed.
If you would like us to review your internal control procedures, please contact us at (616)642-9467.
