Presentation on theme: "Practical Aspects of Cash Management"— Presentation transcript:
1 Practical Aspects of Cash Management (Real life problems)Presented by Mr Cheng Soon Keong, Director16 Sep 2008
2 Agenda The Perennial Resource / People Issue Risks in Cash / Cheque HandlingCommon Cash Management Tools
3 The Perennial Resource / People Issue $1.21 millionSean Lee went missing in October 2005
4 The 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?
5 The Perennial Resource / People Issue Finding the Right PersonSourcesBoard membersSupport groups like NVPCInterest groupsChallengesTime / attentionHonorarium?
6 Risks 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”
7 Risks in Cash / Cheque Handling Problems with cheques: Space in front CashTwenty2Cash2,000.00Two Thousand Only
8 Risks in Cash / Cheque Handling Problems with cheques: Forged signatureABC Pte Ltd2,000.00Two Thousand Only
9 Other 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
10 Common 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