Deciding how best to operate the financial
side of your organisation involves weighing up the pros and cons of the big
three options. While cash, cheques and credit cards all have their advantages,
there are drawbacks to be aware of too. However, when managed well, any of the
three options could be just the right fit. Let's consider them one by one.
Cash
Benefits: Convenient,
easy to handle. Cash in cash out operations are simple to operate.
Drawbacks: Possibility
of theft or accusations of theft.
Suggestions: Count and record cash receipts promptly and regularly. Have at least two people
present for all transactions. Keep cash locked in a secure location where only
a limited number of people have access. Deposit cash in a bank regularly, so
large sums are completely secure. Have signatures of receipt whenever cash is
distributed.
Cheques
Benefits: Cheques
deliver an easy to follow paper trail. All payments are recorded by the bank.
Drawbacks: With
the recent increase in impersonal banking, forgery is possible. Though a small
risk, depositing cheques through ATMs (automatic teller machines) could result
in a forged cheque being processed.
Suggestions: Secure
all blank cheques in a locked location. Also secure under lock and key all
signed cancelled cheques that are returned from the bank.
Debit and Credit Cards
Benefits: Cards
are widely accepted and more traceable than cash. Cards can be issued to key personnel
for them to make purchases on behalf of the organisation.
Drawbacks: There
may be a temptation for staff to use cards for personal use, intending to pay
back later.
Suggestions: Have
clear non-negotiable rules that cards are not for personal use. Set daily
transaction limits, and meet with bank officials to discuss and set other
limits, like limits on certain classes of vendors.
With some forethought and by remaining
mindful of possible shortcomings, cash, cheques or debit and credit cards may be
suitable for your organisation.
