Internal Controls serve several purposes. They help to analyze sufficiency of management over her assets, operations and financial controls. It’s recommended that management or a small business owner should keep updating on it to prevent any flaws or frauds in their controls.
The following are guidelines on cash receipts that can be used to assess and establish an effective system of internal controls:
• First see check date i.e. old dated may be expired or posted dated.
• Numeric figures should match with alphabetic figures.
• Cash receiving, processing, recording, and bank statement reconciliation functions are clearly segregated.
• Checks received are listed individually on a control sheet/cash register for comparison with the bank deposit ticket/slips/receipts.
• Checks are restrictively endorsed (stamped “For Deposit Only”) by the person opening the mail.
• (For fraud protection it is recommended that your account number NOT be included on the endorsement stamp).
• Cash is deposited intact (without any “temporary” withdrawals, say for petty cash purposes) in a bank account and on a timely basis.
• Duplicate deposit slips are prepared.
• Validated deposit slips are received from the bank and attached to the deposit detail.