While we are all taught about the concept of checks and balances in school, the term has an entirely different meaning in the world of accounting. One of the primary reasons why it is important to hire a Melbourne accountant is to ensure proper checks and balances in your business.
Basically, just like the judicial branch of the government, you hire a Melbourne accountant to oversee how the money and assets of the company is handled and ensure it is done so appropriately and honestly.
In essence, the checks and balances conducted by your Melbourne accounting is designed to prevent theft and embezzlement. This is especially important for employees who are allowed to handle cash and other forms of company assets.
Just like in government, the segregation of powers can significantly help in keeping anyone from making critical decisions by themselves. In accounting worlds, Melbourne accountant and professionals call this the segregation of financial responsibilities. For instance, if the company assigns one person to handle the books, while another should handle the collection of receivables and yet another for the accounts payable.
In addition, the person who cuts the check with requires the signature of another person. This will prevent one person from having all the financial power or responsibility.
Companies take in convertible assets and cash such as money orders and checks and a Melbourne accountant can develop a careful procedure regarding the proper handling of money.
In addition to processes, many companies are control the access to certain areas to certain number of employees. This includes sales, server room, valuable goods and storerooms.
Checks and balances is one of the reasons why you need to hire a Melbourne accountant.