“Cash” refers to all forms of currency, including coins, checks, money orders, and credit card transactions. Understanding how to properly handle cash protects against the loss of funds and distributes the workload of managing your organization’s money.
Handling Cash Best Practices
Cash accountability ensures that cash is accounted for, properly documented and secured, and traceable to specific cash handlers. Follow these steps to hold your organization accountable:
- Keep the number of people who handle cash to a minimum.
- Keep track of who has access to cash and checks.
- Know where the money is and who is handling it.
- Issue a cash receipt for each payment made to the organization.
- Endorse checks “for deposit only” immediately when you receive them.
- Make deposits within five days.
- Verify deposits against receipts.
- Use a buddy system when transporting cash.
Reconciliation is a task that involves comparing your organization’s ledger to its bank statements. If the records don’t match, you must identify the source of the discrepancy. Check bank statements against deposit and cash receipts at least monthly.
To prevent problems in invoicing and bank reconciliation, the person who reconciles the bank statement should not be involved in daily banking activities. For example, the reconciler should not be the same person who collects the cash, makes the deposits, issues the checks, or writes the receipts.