Internal Controls Over Cash 2025

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Taking all purchase discounts offered: This is a good internal control as it ensures that the company is minimizing its cash outflows. By taking advantage of all available discounts, the company can save money and improve its cash flow.
Internal Control of Cash Receipts Obtaining employee bonding insurance, requiring background checks. Establishing segregation of duties. Safeguarding cash and cash equivalents in secure locations. Using a lockbox to receive cash payments from customers. Making daily bank deposits.
The objectives of internal controls for cash disbursements are to ensure that cash is disbursed only upon proper authorization of management, for valid business purposes, and that all disbursements are properly recorded.
Basic internal control procedures for cash Use a point-of-sale (POS) system. Secure cash in a register connected to the POS. Keep a comprehensive list of all vendors. Verify the identity of all vendors to mitigate fraud. Implement passwords and two-factor authentication on all financial systems.
There are four internal control measures for cash. They are employee background checks, use of written protocols, separation of duties, and securing assets and cash in safe locations.
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Effective internal control over cash requires segregation of duties.
The basic principle of segregation of duties also applies in controlling cash disbursements. Following are some basic control procedures for cash disbursements: Make all disbursements by check or from petty cash. Obtain proper approval for all disbursements and create a permanent record of each disbursement.

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