Importance Of Cash Control

Written by Peter Tran

June 26, 2017

Cash is a vital component of any profit-generATIng organizATIon. An organizATIon’s assets generate revenue, which in turn generates cash inflows. These cash inflows are used for several purposes: to pay creditors, compensate employees, reward shareholders, provide asset replacement, and provide for growth. Cash is unique because it’s the single asset that is readily convertible into […]

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Cash is a vital component of any profit-generating organization. An organization’s assets generate revenue, which in turn generates cash inflows. These cash inflows are used for several purposes: to pay creditors, compensate employees, reward shareholders, provide asset replacet, and provide for growth.

Cash is unique because it’s the single asset that is readily convertible into any other type of asset. Therefore, it’s also the most widely desired asset. However, cash is also the asset that is most susceptible to fraud and abuse. Therefore, managet has to ensure that adequate controls and safeguards are in place to eliminate any unauthorized transactions with cash.

Fortunately, there are ways managet can safeguard the cash generated by its organization. Each of the following methods will help an organization prevent losses due to human error or theft:

o Monthly bank reconciliation

o Segregation of duties over cash handling

o Accountability for cash shortages

o Authorized cash disburset

o Internal audits

Monthly Bank Reconciliation. Monthly bank reconciliation will help ensure that the amount of cash generated by an organization is consis with bank records. In addition, an independent review of the reconciliation by managet will provide an additional safeguard. Independent verification of bank reconciliation acts as a check to make sure the reconciliation was done properly and ensures there is no abuse of the organization’s cash.

Segregation of Duties Over Cash Handling. Every organization must make sure that there is adequate segregation of duties over cash handling. Separating the duties of cash receipts and disbursets prevents an indidual from committing and concealing embezzlet.

Accountability for Cash Shortages. Managet should hold supervisors accountable for cash shortages. If supervisors know that they’ll be held accountable for a cash shortage, they’ll be motated to keep a close eye on how cash is used within their departts.

Authorized Cash Disburset. Managet should allow cash to be disbursed only through checks issued by authorized ers, which will provide a method for tracking cash usage. In addition, your organization should require atures on all checks in order for them to be valid.

Internal Audits. Every organization should ar to have internal audits conducted on a regular basis. Whether the auditors come from an internal audit staff or an outside auditing firm, auditing an organization’s accounting system can identify how effecte and accurate the operation is and whether or not any improvets need to be made.

ESTABLISHING A QUICKS CONTROL ENVIRONT

Quicks allows more than one user to access company files. (Conceptually, an unlimited number of users may have access to the company’s data files, but only fe users may work with the data at the same time.) When multiple users will have access to the company’s Quicks data files, it generally is necessary to create a control environt that protects the data from unauthorized use. For example, some users may not need access to sensite payroll data, while others may not need access to accounts receable and sales information.

One of the best ways to prevent errors when posting transactions in Quicks is to limit access to specified users. If passwords and access permissions are not ased, users have unlimited access to all areas in Quicks. When setting up Quicks, one user should be deated as the Quicks Administrator.

The Quicks Administrator has unlimited access to all areas of Quicks and ass passwords and access permissions to other users. The name and password for the Quicks Administrator can be set up by selecting “Set Up Users” from the “Company” u. The Quicks Administrator must be set up before any other users can be set up. Although Quicks does not require the use of passwords, the Quicks Administrator should set up and use a password since anyone logging in to the company’s Quicks files as the administrator has full access to all areas in Quicks. After setting up a name and password, the Quicks Administrator should click the “Closing Date” button in the “User List” window and enter the date through which s are closed in the “Accounting” preferences dialog box. The administrator can also password-protect the closing date (requires single-user mode). When this feature is enabled, Quicks requires users to enter the password before they can make changes to periods that have been closed.

The Quicks Administrator is the only user who can:

o Set up other users.

o Change other users’ access permissions.

o Set up a company file using the “Easy Interview.”

o Change company information (such as company name, , fiscal year, tax year, tax form, and federal identification number).

o Change company preferences.

o Condense data.

o Import and export data.

o Apply for Quicks Merchant Account Services.

Note: Since the Quicks Administrator has the ability to password-protect the entire company’s files, has access to all accounting functions, and ass access to all other users, the company should carefully consider whom to select as administrator. The person selected should have an understanding of the importance of this position on the internal control of the company. Some companies deate the controller or Chief Financial Officer as the Quicks Administrator because those indiduals normally do not have direct interaction with the software.

The Quicks Administrator can set up additional users and specify the areas to which each person has access. To do so, select “Company” from the u bar and “Set Up Users.” Then click the “Add User” button in the “User List” window. As a user name and password for the new user. Even though Quicks does not require the use of passwords, each user should be set up with a password that must be used when logging in to the company’s Quicks file. (An unlimited number of users can be added, but only fe can have access to the company’s data file at the same time.)

After setting up the user name and password, the administrator then specifies whether the user will have access to selected areas of Quicks or all areas of Quicks. The user should not be gen access to all areas of Quicks since that permission essentially establishes a second administrator allowing users to access the following:

o Sales and accounts receable.

o Purchases and accounts payable.

o Checking and credit cards.

o Inventory.

o Time tracking.

o Payroll and employees.

o Sensite accounting actities such as bank transfers, general journal entries, and banking.

o Sensite financial reports.

o Changing or deleting transactions.

o Changing closed transactions.

Note: Even if users need access to most of the preceding areas, they should not be allowed to change closed transactions.

Rather than ging users access to all areas of Quicks, the Quicks Administrator should ge users access to selected areas. In that case, the Quicks Administrator specifies whether the user should be gen no access, full access, or selecte access to each indidual area listed in the preceding paragraph. If the user is gen selecte access in a particular area, the Quicks Administrator also must specify whether the user can (a) create transactions only, (b) create and print transactions and forms, or (c) create transactions and create reports.

Sensite Accounting Actities. Users generally should not be gen access to sensite accounting actities. Such actities include:

o Maintaining the chart of accounts.

o Working in the account register for .

o Reconciling accounts.

o Making journal entries.

o Using the “Accountant’s Review.”

o Transferring funds between accounts.

o Using banking.

o Creating budgets.

o Printing registers.

o Condensing data.

Even if users are gen full or selecte access to sensite accounting actities, they cannot create financial reports (with the exception of the “Payroll Report”) or change or delete previously recorded transactions. Those permissions must be ased separately, as discussed in the following paragraphs. The Quicks Administrator generally should be the only user with access to sensite accounting actities.

Sensite Financial Reports. Users generally should not be gen access to sensite financial reports (such as the balance sheet, profit and loss reports, budget reports, cash flow reports, income tax reports, and audit trail reports). That access allows users to create all reports and graphs available in Quicks. However, even users with access to reports cannot change or delete transactions included in the reports. That permission must be ased separately, as discussed in the following paragraph. The Quicks Administrator generally should be the only user with access to sensite financial reports.

Changing and Deleting Transactions. Even if Quicks users have full access in a particular area, they cannot change or delete transactions in that area unless they are gen that permission in the “Changing or Deleting Transactions” window. For example, a user with full access in the sales and accounts receable area cannot change invoices or sales receipts unless they are gen permission to change or delete transactions. However, even if users do not have permission to change or delete transactions, they can change or delete transactions they entered in the current Quicks session so that quickly identified data entry errors can be corrected. Users that are gen permission to change or delete transactions can alter transactions only in areas in which they have access. For example, users that have access to the inventory area but not to the payroll area cannot alter payroll transactions even if they have permission to change or delete transactions. The Quicks Administrator generally should be the only user with permission to change or delete historical transactions.

If a user is gen permission to change or delete transactions in areas in which they have access, the “Changing or Deleting Transactions” window also asks whether the user should be able to change or delete transactions recorded before the closing date. The Quicks Administrator always should deny users access to such transactions by selecting “No” in response to that question. Even when “No” is selected, users can view prior-period transactions in Quicks areas to which they have access. If “Yes” is selected and the administrator sets a password, the user will be required to enter the password.

Viewing Data. Quicks allows the Quicks Administrator to limit a user’s access to creating sensite financial reports or creating and printing sensite reports. Companies can use this feature to allow the Controller, Chief Financial Officer, or another person independent of the accounting function the ability to oversee the accounting operations. Because many companies frequently have accounting staffs, this increased oversight can mitigate some of the risk to the system of internal control created by having limited segregation of duties.

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Article Source:
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Happiness is for those who plan well and pursue. A profound among us have been proven those who have true dream to live for likely REALIZED IT. It is just simply the person working toward the DREAM days and night until accomplishment. There is a phrase of efficiency a head of you. Steps and obstacles at first seem tremendous. However, just with some times those difficult steps and challenges are so easy performance for you. There are also plenty of tools including VISUALIZATIONS and helps are around you.

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