Internal Controls - Accounting for Cash
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All right. Let's talk about some examples
for internal controls just for cash.
Okay. There's some pretty
straightforward ones uh effective
uh will protect cash and they should
meet three guidelines, okay,
these are what the what you should
follow when you're creating
examples of internal controls just
specifically for cash one is I want to
handle cash for the handling of cash
is separate from the record keeping
again that's the most common.
one separation of duties
I don't want the person with custody of
it to be also the one that's doing the
record keeping of it
again you're gonna hit it so many times
it this is just a very important one.
Another one is cash receipts are
promptly deposited in the bank I don't
want to have a lot of cash on hand
that opens the door for theft internally
or theft externally with people coming
in and maybe robbing me or something,
when I have cash on hand I want to take
it to the bank as quickly as I can
typically you're going to have
some businesses do it twice a day or at
least once a day.
And then finally cash disbursements are
made by check or EFT
why check or eft because I have a number
that's associated with it I don't want
to just give somebody cash
because if I give somebody cash they can
dispute it as my word over theirs
I would much rather give them a check so
I have that paper trail
to go back to see who endorsed it who
you know cached it
who was paid to and all that, so those
are three very important guidelines when
it comes to
controlling your cash internal controls
for cash. Appreciate it.