|Home > Services > Audit and Assurance > Internal Audit|
Cash Receipts and Cash Management Internal Audit
Companies that lack adequate cash receipts systems, policies and procedures can cost themselves thousands, if not tens of thousands, of dollars. Ineffective cash management, including billing and collection, affects cash flows and can impact a company’s overall productivity. The late billing of customers and slow pays will extend interest free loans to customers. Poor procedures to reconcile aging accounts and overdue collection allow bad debts to increase. Poor internal control of check receipts and check cashing may lead to schemes such as a kiting, lapping of accounts, and various types of check fraud. After all, it is cash receipts that pay for the products and services needed to keep your company in business.
Accounts Receivable – We noticed client concerns usually include some of these questions: Are all sales being recorded and collected? Do you have proper segregation of duties for sales, recording, collections and deposit functions? Do you use a collection agency, and if so, is there a reconciliation process of accounts out for collection and amounts that been collected and returned? Are all invoices accurate and billed on a timely basis? Does the AR sub ledger agree to the general ledger and is someone reviewing the aging of the sub ledger? These concerns initiated requests for an internal audit to investigate and to recommend solutions to tighten controls in these areas.
Examples of Cash Receipt Findings
Cash Management - The Treasury department is usually faced with not only controls such as receipts on all sales but also cash controls for deposits, timely bank reconciliations and approval on check writing procedures. In addition, the Board normally has an investment policy to instruct the Treasurer how to invest; this must be tested for compliance and internal controls.
Some questions to ask to ascertain if there should be concern in this area are as follows: Who is on the bank account as an authorized signer? Are two person signature checks used? Are signature plates and electronic signature methods safeguarded from unauthorized access? Are checks numerically sequenced to account for all checks? Have old signature plates been disposed of properly? Are there an excessive number of bank accounts due to the lack of closing procedures? Is there a use of EDI, wire transfers and a sweeping process for efficiency?
Examples of Our Cash Management Findings
When you need to review your company's cash receipts and cash management areas to ensure efficiency and with appropriate checks and balances, contact Decosimo's internal audit team, and ask us how we can help. Decosimo has the experience and credentials to assist you with establishing controls to monitor and manage your company’s cash
Decosimo’s internal audit team has provided internal audit advisory services to existing internal audit departments of financial institutions, utility and manufacturing companies. Our internal audit team consists of Certified Public Accountants and Certified Fraud Examiners. Our internal audit services management team has over 30 years of experience creating and managing internal audit departments for public and private clients in industries including, manufacturing, retail, energy, healthcare, and the restaurant and entertainment fields.
To get started, ask about our half day, no charge, “Walk and Talk.”
Decosimo is an independently owned and operated member firm of both the Moore Stephens North America (MSNA) association of member firms and the Moore Stephens International Limited (MSIL) network of member firms. Neither MSNA nor MSIL provide services to clients. Decosimo is a separate and distinct legal entity, subject to the laws and professional regulations of the jurisdictions in which it operates, and is not authorized to obligate or bind MSNA, MSIL, or any other member firm of MSNA or MSIL. Decosimo is liable only for its own acts or omissions and not those of any other person or entity including MSNA, MSIL and other member firms of MSNA and MSIL.