How many of us hide our chocolate stash from our kids and spouse? If they knew they could snack on a few pieces without us knowing about it, pretty soon we would find out that there was no chocolate left! What about the family cookie jar? Do your kids have a daily cookie limit or a requirement to ask permission before getting into the cookies?
Cash in business is much like the candy and cookies that are in our family home. Entrepreneurs and business managers have to restrict access to cash, limit the amounts that can be obtained at any point in time, and permissions have to be in place to ensure that only authorized personnel can touch cash.
The second pre-condition to handling cash in business after determining who is authorized to handle cash is maintaining separation of job duties and creating policies and procedures that create dual controls and custody requirements for cash.
An important step to take when protecting cash and the cash handler is to separate cash handling duties among different employees. This is so no single employee has unilateral control over the cash handling process. The principle behind this concept is a separation of duties. By separating duties and requiring that at least two employees are involved in any cash handling transaction the risk of cash loss can be reduced.
Dual custody is a sound business practice for transporting cash internally and externally, for counting cash, and for other critical cashiering operations. We see this common practice across many industries. You’ve probably witnessed cash being transferred before. You may remember seeing a grocery clerk moving cash from the register to the store safe, or maybe at the bank when money is transferring between the vault and the cashier’s drawer, and nearly everyone recognizes the Brinks or Loomis armored car employees moving bags of money for cash valeting services. In all of those examples, you will see two people involved in the cash handling tasks. Often one person carries the cash and makes the deposit while the other is a lookout for safety and double checks the employee handling the cash.
Having two employees engaged in the activity reduces the risks of robbery and theft, it also encourages cash handlers to audit one another, and if a cash loss does occur the handlers are protected from unwarranted suspicion because they are following the correct procedures and policies.
Establishing dual controls in business is crucial to safeguarding cash, policies that require two employees to count cash, or to make a bank deposit, or to open the company safe, are based on the idea that one person is completing the task while the other is auditing and witnessing the completion of the task.
Dual controls can also be established in other ways, such as requiring dual signatures on cash transaction forms and documents or requiring dual logins on the point of sale terminals, and dual control safes that require keys and a combination lock. The purpose for each of these processes and procedures is to ensure that at least two employees have to be present when accessing cash.
We hope that you find these cash handling suggestions valuable and that you incorporate them into your business practices. Remember, when you have debt collection issues and need someone on your side, or maybe you want a better understanding of how you can recover bad debts, know that Burt and Associates is your go-to expert. Please feel free to contact us today through our website, email, or by phone. Our representatives are available to help you today.