Measures or Controls to Ensure the Proper Handling, Recording and Movement of Cash

 

 

Secret Recipe is a company with many branches across the country and even worldwide. The handling of cash plays a very crucial role for all companies around the world. This is because most of the transactions are taken by cash which makes it more important and harder to handle. Secret Recipe should adopt and adapt to certain measurements and control in order to ease their movement of cash throughout the company. There are a few measurements and control of business operation which will be able to ensure the proper handling, recording and movement of cash within company business operations. The five measurements which Secret Recipe can be able to implement are enhancing the collection and payment throughout the company, Limitations over accessibility and availability, Supervision, monitoring and traceability of fund movements, Planning and budgeting controls and Establishment of accountability.

 

The business could apply a much more enhanced collection and payment system. The system will need to review and verify all the source documents from branches in different location and synchronize with the system in headquarters. This makes it much more easier for companies such as Secret Recipe to review their earnings and losses throughout not only the entire company but also their branches worldwide in making it easy for them to come up with future plans.

Another method which Secret Recipe could be able to implement is to limit the overall access and availability in handling the inflow and outflow of cash movement. As an example, the company should  have certain grouping of signatories with different layering for the issuance of payments to vendors and suppliers or financial institution.

 

Other than that, Supervision, monitoring and traceability of fund movements are a crucial measure and control for Secret Recipe in their business operations. Secret Recipe should be able to hire much more independent staffs that are not involved in handling monetary transactions to check on the monthly bank statements against the cash book record. By doing so they are able to detect if there is any irregularities in the transactions involved. Secret Recipe is a company with many branches throughout Malaysia and even worldwide, with this, it becomes much more difficult for the company to handle cash. Therefore a clear solution to this is by dividing the tasks among the employees in cash management. If cash handling is split among Secret Recipe employees, there will be a much smaller margin for error to be made. If there is only one person in charge of handling the cash, there will be a much more larger margin for error or even fraud to occur within the company. The tasks must therefore be delegated properly between the employees in order for this problem not to occur. As an example, some employees will just receive the cash while the others record transactions and so on.

 

Moreover, Secret Recipe should be able to have a good Planning and budgeting control which means the company should have a cash flow forecasting. This is because good financial control is not only socially responsible but helps a business to better achieve its aim and objective. The company forecast can be compared with actual figures to improve future predictions and planning. It also helps to motivate the company into achieving its goals. As an example, comparing their past financial statements can be used to find errors and flaws the company has undergo throughout the years. Reviews can also be made by Secret Recipe in order to get great satisfactory from their customers by giving them forms in what to improve within the restaurants. Secret Recipe should also be aware not to place their branches without knowing the proper external factors they face. As an example, placing a branch in a location in the city will gain much more profit and will gain much more customers compared to a branch located in a far and desolated area with few residents.

 

Last but not least, Secret Recipe should implement the Establishment of accountability. This means that the company is selective in choosing the person in charge in handling and managing the cash of the company. Proper background checking is crucial before entering the company and even before the appointment of this person. This is in order to ensure there is no internal fraud or even losses made within the company. In our group, we suggested that companies should assign the duties to the most trusted and longest working employees in the company to avoid this problem from happening. In our group, we believe that establishment of accountability will be the most effective. This is because responsibility is one of the most important characteristics an employee must have when working as that is how trust will need to be gained.