Presentation on theme: "Practical Aspects of Cash Management"— Presentation transcript:
1Practical Aspects of Cash Management (Real life problems)Presented by Mr Cheng Soon Keong, Director16 Sep 2008
2Agenda The Perennial Resource / People Issue Risks in Cash / Cheque HandlingCommon Cash Management Tools
3The Perennial Resource / People Issue $1.21 millionSean Lee went missing in October 2005
4The Perennial Resource / People Issue Roles and Responsibilities of TreasurerRoles & Responsibilities of TreasurerIs a member of the BoardOversees finances of the organizationResponsible for annual budget“Key person” for formulating financial policies and procedures Held responsible with personal liabilities?
5The Perennial Resource / People Issue Finding the Right PersonSourcesBoard membersSupport groups like NVPCInterest groupsChallengesTime / attentionHonorarium?
6Risks in Cash / Cheque Handling Problems with chequesForgeryRoom for “add-ons”“Cash Cheques”Who checked the supporting documents?“ASSUME”Hunting down the signatories?“Boss say pay”
7Risks in Cash / Cheque Handling Problems with cheques: Space in front CashTwenty2Cash2,000.00Two Thousand Only
8Risks in Cash / Cheque Handling Problems with cheques: Forged signatureABC Pte Ltd2,000.00Two Thousand Only
9Other Common Possible “Leakages” Leakages in Revenue / ReceiptsForgot to billForgot to collectFundraising costLeakages through Liabilities CommitmentUnauthorised commitment“Interested Party Transactions”Bulk PurchasesStandard Payment Controls Cannot Detect
10Common Cash Management Tools ProsConsDaily MonitoringDetect errors almost immediatelyResource intensiveApproval LimitsPrevent unauthorised vendor, commitment or paymentSmall, broken down payment amount bypass Board’s awarenessSupporting DocumentsProves the validity of the payment/receiptCan be duplicatedNo time to reviewBank ReconciliationDetect errors usually at month-endErrors found out too lateBudget ReviewBoard’s scrutiny and clarification enquiriesOnce a yearLack of knowledge