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Strong internal controls are necessary to prevent mishandling of funds and safeguard assets. They protect both the University and the employees handling the cash. Safeguarding Cash Link
Recording Cash Receipts Link
Reconciliation Link
Segregation of Duties LinkNo one person should be allowed to collect, handle or transport and deposit checks/currency without some additional control feature to ensure that all funds are accounted for. Examples of such controls are as follows:
Gifts/Personal Checks Link
Related SU policy: Gift Acceptance Policy Fees and other Revenues LinkUse an accounts receivable account to process billing and collection for routine revenue activities. If you are unsure if a cash receipt should be recorded as revenue or an offset to an expense, contact General Accounting in the Comptroller’s Office for assistance. Internal controls surrounding this type of activity include:
Related SU policy: Revenue from Transactions with External Parties Bank Accounts LinkThe opening of any University bank account requires proper approval.
Related SU policy: Bank Accounts Who is the one responsible for the authorization of write off of accounts receivable?1. Approval: The authority to approve the write off of uncollectible accounts is vested in the Chief Financial Officer (CFO) at each campus.
Why should the responsibility for maintaining the accounting records be separated from the responsibility for operations?The responsibility for maintaining the accounting records should be separated from the responsibility for operations so that the accounting records can serve as an independent check on operations.
What is internal control of accounts receivable?The purpose of accounts receivable internal controls is to ensure that sales invoices are properly recorded and that customers pay promptly in accordance with the agreed terms of business.
What are good internal controls for accounts receivable?The key controls to consider are:. Require credit approval prior to shipment. ... . Verify contract terms. ... . Proofread invoices. ... . Authorize credit memos. ... . Restrict access to the billing software. ... . Segregate duties. ... . Review accounts receivable journal entries. ... . Audit invoice packets.. |