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Delegated Authority
You must delegate authority to different persons so no one person gets tempted to steal.
If your business has grown to 5-15 persons it is not practical or time-efficient to expect that you should personally make all the decisions and authorise all transactions.
You have to delegate authority to members of staff.In order to protect the ones you have delegated authority to and to avoid temptation and mis-use of your assets there must be a separation of the different duties in the company.
Different duties
No one person should be in charge of all the duties:
- Ordering goods
- Receiving goods
- Authorising the payment
- Keeping the account records
- Reconciliation of the accounts
Make instructions
You should make procedures that include instructions for:
- Placing and authorising orders for goods and services
- Signing cheques
- Authorising staff expenses
- Handling incoming checks and cash
- Checking and authorising accounting records
Checking and authorising accounting records
The key responsibility for you as the owner of the company is to check and authorise records, count petty cash and review orders from suppliers from time to time.
If you show too little interest for the financial control it can tempt weak souls.
If you’re passionate about something and you work hard, then I think you will be successful.
– Pierre Omidyar, eBay Founder
