Accounting for Purchases and Cash Payments, Page 11

Managing Cash Payments in Business

To avoid loss, businesses must manage cash payments efficiently. All cash receipts should be deposited in a bank account.

To manage cash payments, businesses should: 

1. Authorize all cash payments. Each payment should be supported by an approved source document, such as an invoice.
2. Pay staff with checks, and allow only authorized persons to sign checks. 
3. Use pre-numbered checks. 
4. Retain an account for voided checks. Mark these checks “void,” and file them in a sequence.