Cash is King is one of the truest statements not only in the business world but in a personal world as well. That expression stems from being one of the primary assets utilized to pay commitments within a company.
The current company I work for is on the smaller side; there are multiple roles that each person handles. With this, it could easily allow for fraudulent activity which is why we have put into place checks and balances to ensure any discrepancies will be caught and addressed. We handle quite a bit of employee reimbursements and subsistence where I work. It would be easy for someone to "pay" themselves a reimbursement if the following procedures were not in place.
1. Reimbursement form is filled out, receipts for proof of purchases attached, and then approved by the Department Manager or Project Manager 2. The reimbursement form along with all allocated receipts are brought to payroll; the payroll specialist then logs the information into their employee file and enters the information into Accounts Payable to be paid. 3. The Accounting Manager then selects the person for payment and provides the list to the Accounts Payable Specialist to pull the necessary backup fithe reimbursement form and receiptstt Once completed, the Accounts Payable specialist prints the checks and brings them to the Accounting Manager for review and signatures. 4. A copy of each check is then stapled to the backup and filed away in the employee file.
Although it seems like a lot of steps to be taken, it has allowed our company to not be subject to fraud in this department. With being such a small business and not having these procedures in place, it could open the doors to people not as trustworthy when it comes to money.
References:
Bragg, S. M. (2011). The Controller's Function The Work of the Managerial Accountant 4th ed.). John Wiley & Sons,Inc