Internal Controls in QuickBooks
Simplicity, speed, and accuracy are some of the basic features of QuickBooks, and why it is now one of the leading software in accounting. But just like all other business oriented software, several users have been able to find a way around QuickBooks, or better still, found some loopholes.
As such, internal control is crucial in every facet of QuickBooks in order to limit fraud risk. Depending on your business size and accounting department, you may opt for some policies and systems to act as checks and balances in QuickBooks.
The following procedures are some of the ways to activate internal controls in QuickBooks:
Limit QuickBooks Permission
A simple employee division of labor within QuickBooks can make a huge difference in your business financial system. Don’t give 100% access to all the facets of QuickBooks to just one employee.
For instance, the employee in control of cash register should never be in charge of inputting cash deposits into QuickBooks, and depositing the fund into the business bank account.
If an employee is given such 100% permission, it makes it absolutely easier for such employee to siphon and conceal funds. You can modify QuickBooks permissions to restrict 100% access to just one or very few employees.
Use Audit Trail Report and SmartVault
Audit Trail Report and SmartVault can be used in QuickBooks as checks and balances for check fiddling. Check fiddling is falsified transactions which often happen when only a few numbers of employees have permissions to certain features of QuickBooks.
Check fiddling occurs when an employee cuts a payable check, signs, cashes it, and modifies the payee field in the records. Check fiddling is even easier if it involved an electronic check compared to a physical check that could be more difficult to alter.
SmartVault is an app that is compatible with QuickBooks. SmartVaults enable users to scan and attach document like money orders, checks, or invoices to all QuickBooks dealings. This is one easy way to authenticate payment.
Also, you can run Audit Trail Report in QuickBooks. Audit Trail Reports scans the system to check for modified payee entry. Additionally, you can sort out the report by transaction in order to authenticate who made changes to payee and at what period.
Verify Your Vendor Contact List
You can run a Vendor Contact List assessment in QuickBooks, and filter the report by date and type of transaction. Such assessment will help you quickly detect irregularities. It is absolutely important to separate responsibilities that involve vendor payments.
For instance, you can appoint one staff member to input vendor purchase order in QuickBooks, and assign another staff member to submit payments via your actual bank accounts. As such, if you suspect any foul play in vendor accounts, you can use the vendor contact list to assess and detect vendor related frauds.
Despite the effectiveness of QuickBooks, weak internal controls system can make it an easy channel for fraud. QuickBooks and internal control should walk hand-in-hand.