What types of internal controls can be implemented to safeguard cash and company assets?
One key internal control mechanism to have in place to safeguard cash and company assets is the "Separation of Duties" because this ensures that no single person has control over the process of cash handling. It's best to have one person handle the receiving of cash and another person handle the record-keeping or the recording of financial information as pertains to cash. Additional, another employee can handle cash disbursements.
Another internal control mechanism to have in place as part of a business is to screen individuals before hiring them. This due diligence in the hiring process can nip any possible theft problems before they truly begin. A business can do a credit check and a background check to see if an applicant has a criminal record. They can also check with previous employers to see if they experienced any theft issues with an individual.
Another internal control mechanism is to ensure every customer who purchases receives a cash register receipt. This forces an employee to ring everything into the cash register to record sales. They then must put the money in the cash register or else they cannot balance out their shift when their work day is done. Posting a sign, visible to customers, asking them to ask for their receipt from the cashier is a way to lessen theft by employees.
Proper storage of cash and other assets with periodically changed locks and combinations, regular inventory counts and monitoring of shipping and receiving are also part of internal controls.