Rely More On Your Process, Not People, To be Scalable
Hire the Right People is important.
However, put in place a fool proof process is more important from Internal Control and Scalability perspectives.
Do not tempt your staff to committing a crime by over entrusting in him or her.
In the example illustrated in the case below clearly reminds us to put in place a Payment Processing SOP. All suppliers invoices would first need to be matched against approved Purchase Orders and evidence of Goods Receipt, before accepting these Suppliers Invoices for processing and aged according to their payment terms.
During Payment Processing, only those accepted Suppliers Invoices earlier which are due for payment will be shortlisted for Payment Run.
At this juncture, the Boss should review this List of Selected Payments to selected Suppliers to see if he agrees or wants to put on hold any particular ones due to some reasons only he would know.
Once the Boss has approved the Payment List, the accountant would then prepare the Cheque Payment or Bank Payment file, the Boss would then either sign the Cheques or go Online to approve the Payments using his own Bank Token.
A good governance would always need joint bank signatories for every payment. Hence other then the Boss himself to sign Cheques, there should be another person.
As for bank Tokens, there should be a Preparer Token and another Approver Token. For joint signatories, then there should be 2 Approver Tokens.
Also, please ensure there is Division of Duties in the whole payment processing, ie, the person who Prepares should not be the person who Reviews, and the person who Approves should be another person.
Hope this little tip helps you go a longer journey in your entrepreneurship.
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