Cash is the riskiest asset of an organization. Why? Because it can be easily stolen or lost.
Below are some controls to prevent or identify these losses.
1-Two people should count any money before it’s deposited to be sure the total is correct.
2-Organizations should acquire a safe preferably bolted to the wall or floor with the code known to limited personnel to safeguard cash, checks not yet deposited, and other valuables.
3-Limit physical access to the area where money is received to just a few people.
4- Don’t keep cash, checks, or credit card slips on a desk or in another unsafe place that is easily accessible. Thieves typically look for petty cash in drawers under desk
5-Nonprofits should use their websites to collect money as much as possible.
6- Organizations should implement a policy indicating that no cash over a certain amount would be accepted.
7- When money is received, it must be deposited promptly in the bank after the count by two separate individuals to confirm the total amount.
8- Nonprofits should perform bank reconciliations, also known as cash reconciliations, every month to be sure all cash transactions have been accounted for correctly.
9- People outside accounting may answer phone calls or emails regarding complaints about payments not showing up in invoices or statements. The question would be– where’s the money these people sent in? The problem could be just an error or an unfortunate situation where money is stolen.
Just knowing that an organization has controls in place to prevent cash theft or losses may be a deterrent to some people with bad intent. The key here is for the tasks to be done all the time, not just once in awhile to avoid problems down the road.
Interested in CPE credits regarding nonprofits? Online Practical CPE Courses
You can also check out my books:
Nonprofit Finance: A Practical Guide -Second Edition— Nominated for a 2016 McAdam Book Award
15 Quick Tips on Becoming a Great Consultant — Free on Kindle Unlimited