Don’t you just love signing checks? In a prior life I was CFO for three different retailers, at different times of course. These were chain store operations with central pay facilities. That means hundreds of rent checks, phone bills, inventory purchases, office supply bills, ad infinitum, ad nauseum. Thousands upon thousands of checks.
Good separation of duties internal control procedures require splitting the paying processes from the acquisition processes. The person doing the buying should not be the same person doing the paying. When I was in public accounting, I once had a Fortune 100 client where the president of a subsidiary defrauded his company of millions of dollars by submitting bogus invoices to take advantage of weak internal controls. The lesson stuck. Signing checks is the last line of defense before the funds leave your coffers. It’s not your signature of course, it’s the eyes and judgment associated with reviewing the disbursement.
Companies come up with all sorts of ways to balance risks. For example, I always employed strict, multi-person signoff procedures on vendor creation. I always felt that the unbridled ability to create a new vendor was tantamount to being able to get a check as all checks must have a payee. Other organizations require dual signatures for checks above some specified dollar threshold. One of these can be signed by the computer but the second must be a manual signature.
But all checks are not created equal. A $50,000.00 scheduled, recurring, monthly mortgage payment carries a fundamentally different risk than a one time $50,000.00 payment to a strange vendor and charged to miscellaneous expense. The same dollar amount but different risks.
The challenge then becomes one of striking the right balance between risk and having a full time job signing checks.
We can help!
We have customized our Dynamics NAV Quickstart database to includes something we call Value Based Check Signing Automation
Features Included (out of the box, only setups are required):
1. Can be set as UNIVERSAL, applying to all bank accounts and vendors.
2. Dollar based THRESHOLDS, where checks below a certain amount are system signed and ones above that threshold require, in addition, a manual signature
3. Can set it up to only apply to selected bank accounts.
4. Can set it up to require manual signatures for selected vendors.
… and obviously various combinations of the above. Furthermore, you can control the check printing such that all checks that require manual signatures are printed together, saving time for A/P personnel to segregate the checks and documentation required for the manual signatures – they all group together.
Make Your System Work for You, Not the Other Way Around. Streamline your Processes to Stop Swimming in a Sea of Checks.