Part 1 of a 3 part series
- Significant decrease in working capital.
- Significant decrease in current ratio.
- Significant decrease in quick ratio.
- Sudden unexpected decrease in cash.
- Cash below projected levels.
- Delay in paying bills.
- Lost cash discounts.
- Excessive bank charges.
Steps to Improve: PREVENTING LOSS
- Limit check signing to a person who controls cost, but does not do bank recs.
- Open the bank statement and skim transactions, or control by budget exception.
- Sign all checks or receive photocopies of all signed checks, where practical.
- Start signing all checks personally.
- If you can’t sign all checks, sign all those over a fixed amount.
- Keep unused checks and checkbook under lock and key.
- Watch out for unsound banks.
- Be sure the funds in the company’s banks are within the federally insured limits.
- Guard against losses from employee theft.
- Institute strict check acceptance procedures.