Segregate Duties - Accounting Software Secrets
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Segregate Duties

Segregate Duties

Creative Ways to Segregate Duties


1. Change the mailing address for the bank statement – have it sent to an address other than the office if the business owner is not usually there. Possible solutions may be that the statement is sent to the owner’s home address or directly to the accountant. In either case, when the statement is opened the checks should be examined for consistent, approved signatures, common payees and other issues.

2. Enlist the help of the accountant – For example, have the bank statements reconciled and financial statements scanned for reasonableness monthly.

3. Use the bank’s lock box service – all checks are deposited directly into the bank account. This serves two purposes: internal control since the office person would not have control of the checks; improved cash flow since money is deposited timely.

4. Check signers – restrict check signing ability to a very limited number of people, preferably just the owner of the small business. If there are multiple signers, requiring dual signatures for transactions over a certain dollar amount is also advised.

5. Require vacations, and have someone else perform the tasks – many cases of embezzlement have been discovered when someone else has to look and see what is being done. Also, according to the average fraud scheme lasted 18 months so requiring regular time off will help to shorten this cycle.

6. Stamp back of checks as they are received for “deposit only” immediately.

7. One person always gets mail, no one else distributes mail.

8. Require back up documents to be submitted with checks for signing.

9. Photo copy everything.

10. Use voucher or 2 part checks.

11. Match deposit stubs to receipts.

12. Unscheduled “surprise audit” including opening mail, making deposit, etc.

13. Be unpredictable.

14. Owner or Manager needs to understand books/know what to look for.

15. Check to make sure backing up properly and regularly.




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