By Jewell Cochran
Why are they necessary?
Simply stated, internal controls mitigate risk of fraud and loss by protecting your assets. Here are some important practices to follow:
- Document and implement financial policies and procedures to standardize rules and promote a culture of consistency
- Immediately endorse checks “for deposit only” upon receipt
- Follow, without fail, appropriate check-signing authority
- Obtain Executive Director signature for all changes to staff pay and position
- Require dual-approval of timesheets from supervisor and employee
- Review vendor payment terms to maximize cash flow
- Take yearly inventory of all capital equipment and purchases
- Cover employees’ workload during absences to determine adherence to procedures
Click here to read the first article in this series – Setting up Best Accounting Practices – Where to Start?