ACC 544 Week 5 Controls for Outflows
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Controls for Outflows
Businesses conduct transactions by cash inflows and outflows. The outflows of a business will be discussedfurther and how to control the risks that areinvolvedwith different areas. The controls that will be addressed will involve the areas of purchasing, accounts payable, cash disbursements, finance, investments, and payroll. Each area will consider the different transactions that take place and how internal controls can assist in reducing fraud and poor decision making.
The purchasing department in a company allows a certain amount of power to the employees whowork in that department. Controls need to be in place to prevent fraud and error from occurring. The number of vendors a company purchases goods or supplies from should be limited. Repeat purchases from the same vendors and suppliers will provide routine transactions that are much easier to track and will provide a faster cycle time. Using the same vendors will provide familiarity of the company to the vendor allowing more accurate quantity. When the vendor is familiar with the needs of the company it will reduce fraud and the number of transactions, which will make purchasing goods easier to track. Another control for purchasing is to purchase from online catalogs. Immediate electronic tracking is available and will permit an instant approval or denial of the purchase. When a purchase is approved, the electronic purchase order can be forwardedto accounts payable to prepare for payment. The purchasing and accounts payable departments should work together to provide a smooth flow of...