As they say, money makes the world go round. And, small businesses need money to operate – which is why a cash handling policy is so important.
We live in a digital age and not every business operates with cash, but many do.
If your organization handles cash, you should have clearly defined cash handling policies and procedures to help protect that money.
A cash handling policy can help protect an organization from fraud and embezzlement.
We work with people we trust. And of course, cash is safe in our business. Well maybe not.
The fact is, cash is simply too tempting for many people – particularly people with financial needs.
This is a difficult fact to think about because of course no one would steal from us, but the reality is people do.
And, it is management’s responsibility to ensure that the organization safeguards its cash assets.
No one wants to hire someone who potentially steals from the organization. That is why good hiring screening and a background check will help to eliminate some would-be thieves.
However, research tells us that a good employee who is put in a bad situation may do something (steal) that they may have never even thought about.
The fact is that people with an incentive (a need), rationalization (I deserve this), and the right opportunity (easy access) are candidates for embezzling funds.
Good cash handling procedures can protect the organization, the employee, and prevent fraud in the workplace.
For instance, let’s say you have a diligent employee who was the last person to document the handling of cash. If some money were to come up missing, this person would have documentation showing that they were never alone with the cash. This could potentially save that person from a false accusation.
Every organization is different, and every organization has very specific needs when it comes to cash in the workplace.
The basic premise should be that cash is never handled by only one person and should be controlled until it is deposited into the bank.
The following are some general guidelines and things to think about that can help you develop a cash-handling policy specific to your organization.
Use this example cash handling policy to ensure your cash is safeguarded.
Purpose: To ensure control and safekeeping of business cash assets.
Cash Handling Policy
Records should be kept on all cash-handling deposits.
These are very simplistic guidelines and should be expanded and adapted to your particular organization.
An editable copy of this document can be found by clicking here.
Organizations lose billions of dollars each year from embezzlement in the workplace .
It is unfortunate but organizations that are victims of fraud and embezzlement neglect to do one thing. That one thing is oversight!
Management oversight ensures that the people and processes in your business are observed and controlled through policies.
Good policies and oversight of cash handling are one way to safeguard against theft.
What does your organization do to prevent embezzlement?
Patricia Lotich, MBA is a Certified Manager of Quality and Organizational Excellence through the American Society for Quality. She has a driving passion to help small businesses, nonprofits and churches fulfill their mission by managing their resources of - people, time and money.