You’ve just been given the task of writing a new procedure that documents an existing business process.  You make sure you understand, and you close with, “I’ll get on this process right away.”

That’s when your boss says, “Process? Did I say ‘process’? I meant processezzz! Plural!”  And before you can blurt out, “What do you mean?”, the boss says you need to develop procedures for all accounting processes, not just the one.  Oh, and he wants them by the end of the month!

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Small public companies like yours may finally have to begin providing the Securities and Exchange Commission (SEC) with certified assessments of their internal controls.  Smaller micro caps will be required to comply with SOX 404(b) reporting requirements beginning June 15, 2010; they’ll have to attest to the effectiveness of their internal controls in their annual reports released on or after June 15 of next year.  So, for those whose annual reports are just seven months away, the time to consider is over — it’s time to take action! (more…)

In the past few weeks we have discussed how understanding and documenting your cash processes with cash policies and cash procedures can prevent internal fraud and abuse.  Externally, one the biggest threats to your cash are customers who fail to pay for what they purchase.  (more…)

We all hope our co-workers and employees are honest, and they probably are.  Yet, improper cash control and poor cash practices can tempt people who are basically honest.  Think about parking at the local mall.  You always roll up your windows and lock your car to protect your possessions, especially if you made some purchases at an earlier stop.  Most of the people who walk by your car at the mall are honest, yet you don’t want to tempt them by making it easy to take something that doesn’t belong to them.

Cash Security Is About Prevention

The same idea applies to your cash process; you want to use best cash practices and follow proper cash procedures.  In business you can reduce cash risk with good cash controls through removing opportunity and temptation.  While your employees may be honest, sloppy cash control is like leaving your car windows down at the mall… you are just begging for something bad to happen. (more…)

Small and medium-sized businesses rely on a steady, consistent stream of incoming cash – customers paying for goods and services with cash, checks, and credit cards. Many retail and service businesses have multiple people conducting cash transactions throughout the day. Creating a cash policy and cash procedure for important cash handling processes like cash drawer management, end of day closing, or cash in deposits, can be vital to protecting the life blood of your business. (more…)

Question of the month: How can Accounting Policies and Procedures help your organization?

The Accounting Department is an area where policies and procedures are usually a requirement, because they are considered part of the internal controls noted in Sarbanes-Oxley. The real question is: What approach are you taking to developing accounting policies and procedures? (more…)

Everywhere in your organization people are carrying out business processes to make things happen. It doesn’t matter if the processes are well defined, poorly documented or if the staff is trained. If things are getting done - it is because people are executing business processes. (more…)

What is the difference between a well-conceived and well-written accounting policy and a poorly conceived and poorly written accounting policy?  Of course, the needs of every organization are different, and the most important element of an accounting policy is that it helps the organization. Last week we mentioned the importance of gathering accounting policies into the accounting manual.  Now let’s review some important points to consider when crafting policies. (more…)

The question “What should be in your accounting manual?” should first be answered by another question: “Why do you need an accounting manual?” Whether you are looking to purchase a pre-written accounting manual or create your own accounting manual from scratch, these are two important questions to answer. (more…)

Question of the month: Do you understand the meaning of the term “internal controls?”

The internal controls requirement in Sarbanes-Oxley Section 404 has created the most uncertainty and distress in businesses. Frequently those of us involved in office processes are not accustomed to having our work planned and verified to the degree that is common on most factory floors. (more…)