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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.
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
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.
- Go to next business issue: Reconciliation
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Copyright © 2009 Dynamic Business Plan 07-02-2012
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