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Best Practices for Cash Controls

In an age where cash and wire fraud are increasingly more common, having strong internal controls over cash has become even more important. To help eliminate fraud risks, consider the following strategies:

• Perform Bank Reconciliations: On a monthly basis, review the transactions hitting the bank account and reconcile the activity to the bank statement. Look for any transactions that may seem out of the ordinary and ask for transaction support from your accounting team to verify it is accurate.
• Review Authorized Signers: Periodically, review the authorized signers on your bank accounts. If an employee is no longer at the Organization, remove them as an authorized signer. Consider having multiple signers for a check if the payment amount is over a certain dollar amount.
• Segregate Cash Activities: Different individuals should perform the following functions when possible: handling physical checks or cash, entering bank activity into the accounting records, reconciling the bank accounts, approving invoices, and signing checks.
• Have Two People Open Mail: If cash receipts are mailed to the Organization, consider having two individuals open the mail and count the money received. This will eliminate the risk of one person pocketing any cash received.
• Verify Wire Transfers: If an individual requests a wire transfer through email, the person receiving the request should call the initiator to confirm the wire transfer is legitimate before sending payment. When making the phone call, make sure to use a trusted phone number for that vendor/individual and not rely on a phone number included in the email address as it could be fake. Additionally, when making electronic payments to a new vendor or an existing vendor that has changed their account information, it is best practice to confirm the account details with the vendor through a trusted phone number prior to issuing the payment.
• Review Cash Processes: Periodically, review the Organization’s cash processes to ensure they are still accurate and make any revisions that are necessary. Update the documentation for cash controls as changes occur.

If you have any questions about best practices and how you can improve your cash controls to reduce fraud risk, please contact Nicole Seaholm via email at nicole_seaholm@copelandbuhl.com or call 952-476-7151.