Separation of duties …
also known as Segregation of Duties or SoD, is an internal control that many businesses use to protect it and its employees from potential error and fraud by having multiple people involved in the completion of a particular task. (say THAT 5 times fast!)
This can be difficult for some businesses to achieve, but should be implemented as much as possible.
Heres how!
First, consider who is responsible for tasks such as:
opening, sorting and dispersing mail
making purchases on the company account
recording and entering transactions into the accounting software
reviewing and approving bills
paying bills
signing checks
making deposits
Next, split it up!
Accountability is crucial! Make sure that everyone is aware of these controls and be sure to delegate these tasks in a way that your TEAM understands what is expected, when they should complete their part and who will be reviewing their work.
By having proper checks and balances in place, a business should be able to catch errors and fraud immediately, or better yet… prevent them altogether!