Sunday, March 29, 2026

What are basic internal controls for cash disbursements & expense allocations?

I.         Cash Disbursements & Expense Allocations

Cash disbursements are generally made for:


1.      Payments to vendors for goods and services

2.      Taxes/license fees

3.      Staff training and development

4.      Memberships and subscriptions

5.      Meeting expenses

6.      Employee reimbursements

7.      Marketing/promotional materials

 

Checks are processed weekly. Invoices submitted to the Owner/President by Wednesday will be processed and paid by Friday of the same week. Checks can be prepared manually within one day, but this should be limited to emergency situations.

Requests for cash disbursements are submitted to Accounting in three ways:

1.      Original invoice

2.      Purchase request (submitted on approved form)

3.      Employee expense report or reimbursement request


All invoices must have the account code written on them and approved by the Owner/President prior to being submitted to accounting.


Every employee reimbursement or purchase request must be documented on the approved form with travel authorization, receipts, nature of business, program allocation, and funding source (if applicable) before approving for reimbursement as follows:

Lodging - an itemized receipt from the hotel detailing all charges, the person(s) for whom the lodging was provided, and the specific business purpose.

Meals and Entertainment - a receipt must be provided showing the cost of food, beverage, and gratuities, including the names of every person for whom food or beverage was provided, and the specific business purpose.

Other Expenditures - a receipt from the vendor detailing all goods or services purchased (including the class of service for transportation) and the specific business purpose.

The Owner/President reviews all requests for payment and:

1.      Verifies expenditure and amount

2.      Approves for payment if in accordance with budget

3.      Provides or verifies appropriate allocation information

4.      Provides date of payment taking into account cash flow projections

5.      Submits to the Bookkeeper for processing

The Bookkeeper processes all payments and:

1.      Immediately enters them into the Accounts Payable module

2.      Prints checks according to allocation and payment date provided by the Owner/President

3.      Submits checks, with attached backup documentation, to Owner/President for approval and signature.

4.      Stamps invoice “paid”

5.      Mails checks and appropriate backup documentation

6.      Files all backup documentation in the appropriate file

7.      Runs an accounts payable aging at the middle and end of each month and submits to the Operations Manager to assure timely payment of all invoices

 

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