The significance of Cash Control


Cash is an essential element of the profit-making organization. Your organization's assets generate revenue generating cash inflows. These cash benefits are used for a number of purposes: payers' credit, employee compensation, shareholder reward, asset exchange and growth

Cash is unique as this is the only tool that can easily be convertible to any other type of asset. That is why this is the most common tool. However, cash is also the most sensitive means of fraud and abuse. Therefore, the management should ensure that there are adequate controls and safeguards to eliminate unauthorized cash transactions

. Fortunately, there are ways in which management can save the money produced by the organization. All of the following methods help the organization to prevent loss of human error or theft:

o Monthly Bank Reconciliation

o Separating tasks against cash management

o Accountability due to cash shortages

o Authorized cash payment

o Internal Audits

Monthly Bank Reconciliation. Monthly bank reconciliation helps to ensure that cash generated by the organization is consistent with bank records. In addition, an independent review of the farmer's reconciliation provides additional safeguards. Independent verification of bank reconciliation works as a check to make sure that reconciliation is properly done and to ensure that the organization's funds are not misused.

Separating tasks against cash management. Each organization must ensure that the tasks are appropriately separated from cash management. The separation of the receipts from payments and payments prevents the individual's commitment and hides embezzlement.

Accountability due to lack of funds. The management should be responsible for cash consumption. If the supervisors know they can expect cash shortages they will be motivated to keep an eye on the use of funds in their department.

Authorized cash payment. The management must allow cash to be paid only through checks issued by authorized signatories, which provides a method for tracking cash flow. In addition, the organization must sign signatures for all checks in order to be valid.

Internal Audits. Each organization must ensure that it regularly performs internal audits. Whether auditors come from internal audit staff or an external auditing firm can control the organization's accounting system to determine how effective and accurate the operation is and whether it should be improved or not.

QUICKBOOKS CONTROL ENVIRONMENT [19659002] QuickBooks allows more than one user to access corporate files. (Contextually, an unlimited number of users can access the company's data files, but only five users can work with the data.) If more than one user can access the company's QuickBooks data files, usually create a control environment that protects the data from unauthorized use. For example, some users do not need access to sensitive payroll data, while others may not need access to claims and sales data.

One of the best ways to prevent errors in publishing transactions in QuickBooks,. If passwords and access privileges are not assigned, users will have unlimited access to all areas of QuickBooks. When setting up QuickBooks, a user must be selected as a QuickBooks Administrator

QuickBooks administrator provides unlimited access to all areas of QuickBooks and assigns passwords and access privileges to other users. You can set your QuickBooks Administrator name and password by choosing "Set up users" from the "Company Settings" menu. The QuickBooks Administrator must be set up before any other user can be configured. Although QuickBooks does not require passwords, QuickBooks Administrator needs to set up and use the password as anyone connects to the company's QuickBooks files as the system administrator has full access to all areas of QuickBooks. After setting the name and password, in the QuickBooks Administrator window, click the "Close Date" button in the "User List" window and enter the date of closing the books in the "Accounting Settings" dialog box. The administrator keeps the closing date under password protection (requires one-user mode). If you enable this feature, users need to provide the password before using QuickBooks before they can change their closed times.

QuickBooks Administrator is the only user who:

o Create other users.

o Change the access privileges of other users.

o Create a corporate file using the "EasyStep Interview".

o Modify company information (such as company name, address, financial year, tax year, tax form and federal identification number).

o Changing Company Preferences.

o Condensation data.

o Import and export data.

o Log in to QuickBooks Merchant Account Services

Note: Since QuickBooks Administrator is able to password protect corporate files, provide access to all accounting features and provide access to all other users, consider the company carefully who is to be appointed an administrator. The selected person should be aware of the importance of this situation with the company's internal control. Some companies have named the CEO or Chief Financial Officer as a QuickBooks administrator because these individuals are usually not directly related to the software.

QuickBooks Administrator can set up additional users and specify areas for each user to access. To do this, select "Company" from the menu bar and "Set Users". Then click on the "Add User" button in the "User List" window. Create a username and password for the new user. Although QuickBooks does not require the use of passwords, each user must have a password to use when logging into the company's QuickBooks file. (An unlimited number of users can be added, but only five can access it simultaneously for the company's data file.)

After setting the user name and password, the administrator determines whether the user has access to all areas of QuickBooks or all QuickBooks. The user does not need access to all areas of QuickBooks since the license basically creates a second administrator that allows users to access:

o Sales and Requests.

o Purchases and invoices.

o Checks and Credit Cards.

o Inventory.

o Timing.

o Payroll and Employees.

o Sensitive accounting activities such as bank transfers, general journal entries and online banking.

o Sensitive financial reports.

o Modify or delete Transactions.

o Modify Closed Transactions

Note: Even if users need access to most of the previous areas, they should not allow closed transactions.

Instead of providing users with access to all areas of QuickBooks, QuickBooks Administrator gives users access to selected areas. In this case, the QuickBooks Administrator determines whether the user should have access, full access, or selective access to each of the areas listed in the previous paragraph. If the user receives selective access to a particular area, the QuickBooks Administrator must determine that the user (s) can only create transactions, b) create and print transactions and forms, or c) create transactions and generate reports. 19659002] Sensitive accounting activities. Users generally do not have access to sensitive accounting activities. Such activities are as follows:

o Accounting Accounting.

o Work in the balance sheet accounts.

o Aligning Accounts.

o Creating Journal Entries.

o Using "Accountant Auditing".

o Transfer funds between accounts.

o Using online banking services.

o Creating budgets.

o Printing of registers.

o Condensation Data

Even when users are granted full or selective access to sensitive accounting activities, they may not make financial reports (except for payroll reports) or modify or delete previously recorded transactions. These licenses must be assigned separately as described in the following paragraphs. QuickBooks Administrator is usually the only user who has access to sensitive accounting activities.

Sensitive financial reports. Users should not generally have access to sensitive financial reports (such as balance sheets, profit and loss accounts, budget reports, cash flow reports, income tax reports, and audit tracking reports). This access allows users to create all available reports and graphics of QuickBooks. However, users who have access to reports can not modify or delete transactions in reports. This authorization shall be designated separately, as specified in the following paragraph. QuickBooks administrator usually only has access to sensitive financial reports.

Modifying and Deleting Transactions. Even if QuickBooks users have full access to a specific area, they can not change or delete transactions in that area unless they are granted such permission in the "Change or Delete Transactions" window. For example, a user who has full access to sales and invoices can not modify the invoices or sales vouchers unless they have permission to modify or delete transactions. However, even if users do not have permission to change or delete transactions, they can change or delete the transactions entered in the current QuickBooks session, and can quickly fix the detected data entry errors. Users who have permission to modify or delete transactions can only change the transactions they have access to in those areas. For example, users who have access to earnings but not payroll can not modify payroll transactions even if they have permission to modify or delete transactions. The QuickBooks administrator is usually the only user who can modify or delete past transactions.

If a user is granted permission to change or delete transactions in the areas where he or she has access, the "Change or Delete Transactions" window also asks whether the user should be able to change or delete transactions recorded before the closing date . Your QuickBooks administrator should always deny users access to such transactions by selecting "No" in response to this question. Even if "No" is selected, users can view transactions for the previous period in the QuickBooks that they have access to. If you select "Yes" and set the administrator password, the user must enter the password

. QuickBooks allows QuickBooks Administrator to limit access to sensitive financial reports or confidential reporting and printing. Companies may use this function to allow the Auditor, the Chief Financial Officer or other person independent of the accounting function to supervise accounting operations. As many companies often have small accounting staff, this increased oversight may alleviate the risk inherent in the separation of duties from the internal control system.

Source by Leigh Ann

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