Keeping Tabs on Your Business Cash - dummies

By Colin Barrow

Part of Starting & Running a Business All-in-One For Dummies Cheat Sheet (UK Edition)

Cash is the lifeblood of any business, whether it’s a multi-billion-dollar empire or a tiny independent company. Refer to these handy guidelines when delegating the handling of cash within your business to ensure a fail-safe system of cash-flow:

  • Separate cash handlers. Be sure that the person who accepts cash isn’t also recording the transaction.
  • Separate authorisation responsibilities. Be sure that the person who authorises a payment isn’t also signing the cheque or dispersing the cash.
  • Separate the duties of your bookkeeping function to ensure a good system of checks and balances. Don’t put too much trust in one person – unless it’s yourself.
  • Separate operational responsibility (actual day-to-day transactions) from record-keeping responsibility (entering transactions in the books).
  • Start out each month with a cash flow projection as far out as is needed to break even and then track performance.