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Recently I was working with a rather large company with multiple locations. Strengthening the controls over cash deposits and available cash was the goal. The timing of actual cash deposits varied since the company accepts cash, credit cards, third party financing and sales on credit. Reports were developed to clearly account for all sales daily and the deposit of cash daily. We then refined our controls.
The key objective was to measure and report available cash. This is cash in the bank that is available for disbursement. Many companies do not measure this number daily and if they do it is often measured incorrectly. The number one mistake is to ignore some or all of the disbursements that have been made that have not cleared the bank. Another mistake is to assume all cash is deposited when due. For example, deposits from credit card sales generally take approximately three days to be recorded in the bank. Deposits made from a remote location are often made using night depository, Those deposits are physically in the bank but often are not visible using on - line banking until the second day after the night deposit. All of these timing differences must be taken into account in calculation available.
If you do not follow these principles, you risk bouncing checks. If you are not sure how to implement proper controls over cash and cash reporting, run to the nearest phone and call me right now 727-587-7871
All the best,
Steve Pohlit, Business Consultant
www.StevePohlit.com
PS Many cash management principles are covered in detail in my FREE 6 week course. Read the following resource box and register.
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