Cash control is the verification of records of ingoing and outgoing cash to a business, organization, or household. Good cash control is needed for responsible accounting.
Cash isn’t just money but can include money orders, credit card receipts, and checks as well.
Cash control involves coming up with a system that tracks money going in and coming out. There are a few elements any cash control system needs.
The first thing you need is to record all transactions as soon as they happen. Every cash receipt and disbursement is recorded immediately. You don’t need anything fancy to record this information, a basic spreadsheet will do. If you’re tracking home expenses a checkbook register can suffice for your checking account.
The only way to make a cash control system work is to ensure that only certain individuals have access to the cash. This ensures accountability in your cash control system.
The documents of a cash control system need to be kept separate from the cash itself. This is important in running a business to ensure that theft can’t occur without you knowing about it. If you keep the cash and your cash control system in one place one could alter the books and take the cash at the same time.