Segregation of Duties in a Small Office
The most important thing to remember in not having any single employee responsible for one or more of the following duties: custody of assets, recording transactions, and authorizing transactions relating to cash.
Two-person office
Clerk/Admin Employee / Director/Chief/Mayor² Write checks
² Mail checks
² Receive cash
² Reconcile bank statements
² Disburse petty cash
² Record accounts receivable and general ledger entries
² Approve payroll
² Authorize purchase orders
² Authorize check requests
² Authorize invoices for payment / ² Sign checks
² Complete deposit slips
² Review bank reconciliations
² Perform inter-bank transfer
² Reconcile petty cash
² Process vendor invoices
² Approve employee timesheets
² Distribute payroll
Three-person office
Bookkeeper / Clerk/Admin Assistant / Director/Chief/Mayor² Write checks
² Record accounts receivable entries and general ledger journal entries
² Reconcile petty cash
² Record general ledger entries
² Reconcile bank statements / ² Authorize purchase orders
² Approve and process vendor invoices
² Disburse petty cash
² Receive cash
² Mail checks
² Authorize employee timesheets
² Approve payroll
² Distribute payroll / ² Sign checks
² Complete deposit slips
² Review bank reconciliations
² Perform inter-bank transfers
Four-person Office
Bookkeeper / Clerk / Office Manager / Director/Chief/Mayor² Write checks
² Reconcile petty cash
² Reconcile bank statements
² Record accounts receivable entries
² Record general ledger entries / ² Receive cash
² Disburse petty cash
² Authorize purchase orders
² Authorize check requests
² Mail checks
² Distribute payroll / ² Complete deposit slips
² Process vendor invoices
² Approve payroll / ² Sign checks
² Review bank reconciliations
² Perform inter-bank transfers
² Approve employee timesheets
Of course, another option to consider is hiring a payroll service or outside bookkeeper to do some of the accounting duties. This helps with segregation of duties.