5 Important Internal Controls for Disbursement Control Companies

5 Important Internal Controls for Disbursement Control Companies

One of the most important things for a disbursement control company to focus on is mitigating risks. At ECL Software we offer fund control software that can help reduce risk and improve your bottom line. Call us at 800-625-5972 for a free demo or read on to learn about five of the most essential internal controls for your company.

1. Delegate Duties to Different Staff Members

One of the most important aspects of any internal control is ensuring that your staff has a segregation of duties. For example, you should not have the same person doing all steps of authorization, such as signing a check and releasing the wire transfer, having access to the blank check stock, recordkeeping, etc. When you have multiple people involved at different levels, it is much harder for one person to take advantage of the system.

2. Choose Authorized Signors Carefully

It is essential to be very careful when choosing authorized signors. They should be people who do not have access to blank check stock, as discussed above, and they should not be able to enter the transaction into the accounting system on their own. We also advise avoiding the signature stamp. While it may be handy, it can be problematic because it can be impossible to prove who used it.

3. Require Dual Signatures

If you want to maximize safety for your company, we strongly recommend requiring dual signatures. This may seem like a pain but it can save you from serious issues. Many companies have a dual signature policy but only for checks for more than a certain dollar amount. This allows for the writing of small, simple checks on the fly, but when large fund distributions happen, at least two people will have to be involved. This is just one example of implementing the first idea above.

4. Pay Special Attention to Wire Transfers

In recent years, wire transfers have been more and more in use. As a result, it is essential to have a wire transfer policy in place. It should be segregated from the responsibility of releasing wire transfers, as detailed above. If this type of segregation is not possible, then you may consider using a call-back procedure that requires your financial institution to contact a specific person when a wire transfer is initiated.

5. Reconcile Bank Accounts within a Reasonable Time

The longer you wait to complete bank account reconciliation, the easier it is for fraud to take place. As time goes on, it may be harder to track the cash disbursement process. More time also gives the guilty party more time to cover their tracks. We recommend that the bank reconciliation process includes reviewing both bank statements and check images.

You will be glad to know that the services available from ECL Software can help improve your disbursement control process. If you would like a free demo to learn more, contact us at 800-625-5972.