Cash Controls

What cash controls covers

Cash controls are the procedures that protect the most liquid and most vulnerable asset a business holds — segregation of duties, authorisation limits, petty cash imprest systems and regular bank reconciliation. The accounting consequence is that the ledger balance and the bank statement rarely agree, and the difference has to be explained rather than plugged.

Challenges here cover petty cash and imprest replenishment, and the entries arising from reconciling items.

Where marks are usually lost

• Adjusting the ledger for timing differences such as outstanding cheques, which need no entry.
• Failing to record bank-originated items — charges, direct credits, dishonoured cheques — that the business only learns of from the statement.
• Recording petty cash top-ups as an expense rather than replenishment of the float.