Cash Management Matrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an example for each. Next, list how each of the principles of cash management works, and give an example for each.
Principles of Internal Control| How it Works| Example|
Establishment of responsibility| Giving one person a specific duty| A receiving clerk has to check in all the orders off of the delivery truck.| Segregation of duties| The work of one person should be reliable.| A ceo has to approve all transactions at the end of the day.| Documentation procedures| Documentation of events that have occurred.| Working in retail, managers have to keep track of all the counts in their department, should one come up missing.| Physical, mechanical, and electronic controls| Safe guarding your assets.| The main branch of the bank stores all the employees’ information in the vault.| Independent internal verification| Involves the review, comparison, and reconciliation of data prepared by one or more employees.| An exemption came up on the report and was reported to the manager on duty right away.| Other controls| Employee bonding and assets to the company.| One good thing about this job is its friendly atmosphere and it also offers 3 sick days per year.|
Principles of Cash Management| How it Works| Example|
Invest idle cash| Excess cash that has to be invested.| Having extra cash at the end of the year can help with next year’s funding since it will cost more.| Plan the timing of major expenditures| Outside finances| Our school hopes to establish more funds with adding more propositions.| Delay payment of liabilities| Having payments paid in a grace period.| My doctor’s office is billing me for my visit from last year, and is now charging interest because it was not paid in 30 days.| Keep inventory levels low| Reducing inventory to conserve space.| My...