Question

Describe some of the internal procedures for cash and receivables management

Answer 1

To control and manage cash and receivables, the company should used the following internal procedures:-

• Account for all cash transactions accurately so that correct information is available regarding cash flows and balances.
• Segregating employee duties.
• Assigning specific duties to each employee.
• Rotating employee job assignments.
• Make certain that enough cash is available to pay bills as they come due.
• Avoid holding too much idle cash because excess cash could be invested to generate income, such as interest.
• Prevent loss of cash due to theft or fraud.
• Ensure timely collection of receivables.

Therefore the above mentioned points are some of the internal control procedures for cash and receivables management.