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Thursday, January 5, 2017

Risks in Cash and how to control it

Risks in Cash and how to control it
Though cash may seem to be only a measuring factor in businesses - a marker for progress - and an appreciable reward after all the hard work put into the job, managing this element involve substantial risks. Any failure to efficiently manage this form of asset would result in huge losses. Even Small scale cash dealings are vulnerable for the money that is earned by a local business, safe-guarded in homes, collected in schools, districts, hospitals and others can be misappropriated. This inherent weakness in keeping cash has led the experts and businesses to introduce elaborate rules governing the cash handling and management. The safe-guards devised for and imposed in the established large-scale companies can also be made of use on smaller scales of work.
There are a multitude of potential frauds that may occur in the process of cash handling, especially since the whole system is managed by humans - employees, who may succumb easily to certain stresses, embezzling money provided they find an opportunity to do so after loosely justifying the motive. An inability of putting down the purchases adequately to peculate the money, to malversate cash from any kind of machine, receiving money or luxuries in an act of embezzlement for a foreign party, embezzling money under threats from any external party, or the inflating the value of any service under the intent of defalcating money are of the several ways in which any employee can succumb to the evil; the frauds that line this work.
To counter such fraudulences in any business, certain controls can be effectively imposed in order to gain security. The different methods of cash embezzlement can be individually controlled through the employment of certain principles. In order to avoid thievery ascertain the fact that the money is always secure, with any sort of access to the money being under authorized personnel. Additionally any type of asset, or balances, must be looked into sporadically. Illegal money transfer or hiving it off can be minimized by making sure that any alterations to payee information or other data is independently authorized, limiting system accession and maintaining job differentiation can also add to the safety of the procedure.
Cash received should be carefully monitored by attaining detailed receipts with accurate, detailed and wholesome information, everything should be brought to due account while ensuring that all matters are supervised to double-check any problems in the system. Falsification of any records should be checked by assuring that everything is independently authorized, reassessed and signed to reassure the correct direction of money. Confirming the authenticity of any sort of account must be done under periodical time frames.

The aforementioned methods are intended to make sure that the cash is managed properly with little or no windows left for embezzlement. However, the employment of these methods must be incredibly disciplined, efficient with due respect given to the procedure employed by a company in order to gain the most out of the system.