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Cash Control

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You have to introduce good control procedures concerning cash. "Cash in hand" is very tempting for humans. Good cash procedures avoid tempting humans.

Open a company account
You have to separate company money from your personal money. The easiest way is to open a company account. And get a company credit card. Then you will know if you withdraw company money for personal use. You could get small business credit cards at American Express.

Keep money coming in separate from money going out
Never put cash received into the petty cash box. Or in your purse. It will lead to error and confusion in the accounting records. All money coming into the company must be paid into the bank promptly and entered into the record.

If you have a shop the money must be entered into the cash register as soon as you receive it.
Money not registered is "burning in the hands of the beholder".

Always give receipts for money received
Giving a receipt protects the person receiving the money. S/he has documentation. It also assures the person handing over the money that it is properly accounted for. Receipts should come from a numbered receipt book and written in ink.

Always obtain receipts from money paid out
Sometimes it is not possible. For instance when purchasing materials from the market. In this case the amount should be noted down straight away. Then it can be remembered when coming home. Remember when no receipts there is there are no proof that a purchase was made.

Pay surplus cash into the bank
Having surplus money laying around the office is a temptation for thieves. A casual approach to cash on the premises might also make people ┬┤borrow┬┤ from it.

Every attempt should be made to pay cash into the bank every day or at least every third day.

Proper procedures when receiving uncounted cash
To protect those who are handling money, there should always be two persons present when opening cash collection boxes, pay phones and other boxes with uncounted cash. Both should count the cash and sign the receipt.

Restrict access to petty cash and safe
Restrict access to petty cash and safe to as few people as possible.

Keep cash transaction to an minimum
Petty cash should only be used as payment when all other methods are inappropriate. Whenever possible use cheque or electronic bank transfers to pay bills. The advantage of this is that it produces a parallel set of accounts. It will show when you receive the bank statement.

It also minimises unauthorised staff to make payments. It reduces theft and fraud.
- Go to next business issue: Physical Control


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Cash Control

 
ciaran kennedy, ireland 30-03-2011
very interesting

Esmeldo, Mozambique 09-03-2011
2008-2010 - Worked 2 years as Accountant & Financial Assistent at Olam Mozambique Lda subsidiary of Olam International Lda - Industry of Import & Export. * Managing customers and Suppliers in my responsability (about 500 summarizing); * To disgne reports and view which will achieve the desired goal; * Petty cash control; * Bank register; * Month close duties according to "Month Close Plan"; * Stock control & Declaration; * Cash & Bank Reconciliations; 2010-Now Working as Accountint & Administrative Assistent at Pilua Lda (Engeneering & Automation Industry) * Entrusted accounting Job for the company; * Ensure that implemented procedures are being followed to while preparing monthly detailed analysis reports of Overheads & Direct Costs; * Review accounts; * Annual budgeting service; * Compliance with SOP; * ...

ho khanh chieu, vietnam 22-10-2010
this topic is so well.i think everyone should not hold cash.and pay credit card

Julio Delgado, jamaica 24-07-2010
Non

ahmed waise ismail, somalia 23-04-2010
i was lecterer inuniversity

 


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Cash Control
Delegated Authority
Four Ways of Safeguarding
Physical Control
Reconciliation



Accounting in Small Biz


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