Cash, Cheque or Credit?

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.