Cash Handling Procedures

34% of SMBs have only a month or less of cash reserves. How do we address this critical issue? Here are 10 essential cash management rules: 1. Understanding Cash Metrics: Focus on operating and free cash flow, not just profits. 2. Building Cash Reserves: Maintain enough cash to cover 3-6 months of payroll, slow months, and unexpected equipment costs. Be cautious in volatile industries. 3. Analyzing Beyond the Bank Balance: Use weekly financial reports instead of just checking the bank balance to better understand cash obligations. 4. Efficient Invoicing: Invoice immediately and manage accounts receivable proactively to ensure quicker payments. 5. Strategic Payment Scheduling: Don’t rush to pay bills; optimize payables for better cash flow and maintain good vendor communication. 6. Inventory Management: Treat inventory as an investment and balance stock levels to avoid cash tie-ups. 7. Growth and Cash Flow: Manage growth carefully by securing credit in advance and understanding the cash conversion cycle to prevent cash shortages. 8. Tax Planning: Treat taxes as a critical expense and work with a knowledgeable CPA to plan for tax implications. 9. Prudent Use of Debt: Use debt strategically to support growth and investment, and maintain diverse banking relationships. 10. Maintaining Flexibility: Develop a flexible business strategy that includes multiple suppliers and cross-trained staff. These strategies can help SMBs manage their cash flow more effectively and safeguard against financial crises. If you want to go deeper, I wrote about this in my newsletter. Please read and subscribe: https://lnkd.in/gP4KXvDU

👉 Accounting Control Best Practices ✅ Implementing effective accounting controls is crucial for maintaining financial integrity and safeguarding assets. ➡️ Here are some detailed best practices to ensure strong accounting control within your organization: 1️⃣ Segregation of Duties (🔒): 🎗 Clearly define roles and responsibilities within your accounting department. 🎗 Assign different individuals to handle key tasks such as approving transactions, recording entries, and reconciling accounts. 🎗 By separating duties, you minimize the risk of errors or fraudulent activities going undetected. 2️⃣ Regular Reconciliation (🔍): 🎗 Perform regular reconciliations of financial records to ensure accuracy and identify discrepancies. 🎗 Reconcile bank statements with internal records, match accounts payable and receivable balances, and verify inventory and fixed asset records. 🎗 Promptly investigate and resolve any differences found. 3️⃣ Documented Policies (📝): 🎗 Establish comprehensive accounting policies and procedures that cover all key financial processes. 🎗 Clearly document guidelines for recording transactions, handling cash, managing expenses, and approving payments. 🎗 Ensure that these policies align with relevant regulatory requirements and industry standards. 4️⃣ Restricted Access (🔐): 🎗 Control access to financial systems and sensitive data by granting user privileges based on job responsibilities. 🎗 Implement strong user authentication methods, such as complex passwords and multi-factor authentication. 🎗 Regularly review and update user access rights to maintain appropriate levels of authorization. 5️⃣ Audit Trail (🔍🚶♂️): 🎗 Maintain a detailed audit trail for financial transactions. 🎗 This includes recording essential information such as the date, time, user, and nature of the transaction or change made. 🎗 An audit trail enables you to trace the sequence of events and quickly identify any unauthorized or suspicious activities. 6️⃣ Regular Internal Audits: 🎗 Conduct periodic internal audits to assess the effectiveness of accounting controls and identify potential weaknesses. 🎗 Assign experienced auditors to review processes, perform testing, and verify compliance with established policies. 🎗 Document audit findings and promptly implement corrective actions. 7️⃣ Ongoing Employee Training (📚): 🎗 Provide regular training and educational opportunities to employees involved in financial processes. 🎗 Offer workshops and courses on accounting principles, internal controls, fraud prevention, and ethics. 👉 By following these detailed best practices, you can establish a robust accounting control framework that promotes financial accuracy, mitigates risks, and ensures compliance with regulations. Mphamed Samir #Accounting #Controls #BestPractices #FraudPrevention #Compliance #InternalAudits

You think you’re profitable…  But your bank account tells a different story. Managing cash flow can feel like a constant puzzle. Late client payments strain your resources, while vendor bills pile up, adding to the pressure. As a result, your business decisions slow down, and growth opportunities slip away. The constant worry about cash impacts your leadership, while delayed supplier payments damage relationships and late fees continue to eat into your profits. But you don’t need to worry more! You can fix this and master your cash flow. By two strategies: 1. Accounts Receivable Strategy: - Send invoices immediately after service - Offer early payment discounts - Set clear payment terms - Follow up consistently - Use digital payment options 2. Accounts Payable Management: - Negotiate favourable payment terms - Track due dates systematically - Take advantage of early payment discounts - Maintain vendor relationships - Plan payment schedules Think of accounts receivable as your accelerator and accounts payable as your brake. Balance them well, and your business runs smoothly. You'll transform from constantly checking bank balances to confidently making business decisions. #accountsreceivable  #accountspayable  #finance  

From studying finance in my MBA to practicing law, one lesson stands out: contracts aren’t neutral. They can be working capital generators or cash flow killers. The truth is, contract clauses shape far more of your financials than most people realize. Get them wrong, and you bleed cash. Get them right, and they actively strengthen your financial position. #1: The Cash Flow Killer - Aggressive Payment Terms "Payment due within 15 days of invoice." Looks fine, until you realize it clashes with your 45-day customer payment cycle. One manufacturer learned this the hard way: 15-day vendor terms forced them into a $500K credit line just to cover timing gaps. Quick fixes – • Negotiate payment terms that match your cash conversion cycle • Add early payment discounts (2/10 net 30) to create optionality when cash is flush • Build in seasonal payment adjustments if your business has cyclical cash flows #2: The Auto-Renewal Trap That Holds Your Budget Hostage "Contract auto-renews for successive one-year terms unless terminated with 90 days' notice." Miss the deadline by a single day, and you’re locked in for another year. I’ve seen companies budget for exits in Q4, only to miss November deadlines and carry unwanted costs well into the next year. Protection strategies: • Cap auto-renewal to 30-day notice periods for contracts under $50K annually (adjust according to your unique situation) • Include mid-term termination rights for material budget changes • Add "convenience termination" clauses where possible • Build in annual spend review meetings with mutual adjustment rights #3: Unlimited Liability - The Balance Sheet Bomb " Each party shall indemnify the other for any losses arising from breach of this agreement." Sounds balanced, until “any losses” means regulatory fines, lawsuits, or data breaches. One logistics company signed this and saw a $30K software project balloon into $1.2M liability after a vendor breach. Protection strategies: • Require mutual indemnification where the commerce lends credence—don't be the only party at risk • Exclude consequential damages from indemnity obligations • Carve out gross negligence and willful misconduct from caps #4: Service Level Penalties That Exceed Contract Value "5% of monthly fees per day of downtime." Seems fair, until 20 bad days wipe out 100% of monthly fees, while your real damages often exceed contract value. Better structure: • Graduated penalties: e.g. 1% for first violation, scaling up for repeat failures • Cap total penalties, e.g., at 50% of annual contract value • Include service credits instead of cash penalties where possible Almost every contract is a financial instrument. Treat it that way. with the same rigor you’d apply to any financial decision. #Contracts #LegalTech #Finance #WorkingCapital #CashFlow #GeneralCounsel #RiskManagement #MBAPerspective #BusinessStrategy #CorporateLaw

If cash dries out of your business, it’s usually your fault. I’ve seen businesses grow on paper. And struggle in the bank. Cash flow isn’t about revenue. It’s about control. Here’s my 10-point cheatsheet to keep cash healthy: 1/ Take upfront payments ↳ Ask for 50% upfront instead of 100% later. ↳ Reduces risk and keeps operations running. 💡 Gives you breathing room to invest or scale safely. 2/ Shorten payment terms ↳ Don’t default to net 30. Aim for 7–14 days. ↳ Follow up consistently on invoices. 💡 Faster payments = more predictable cash flow. 3/ Use the 80/20 rule ↳ Focus on the 20% of actions that solve 80% of cash issues. ↳ Avoid wasting time chasing minor issues. 💡 You fix the biggest leaks with minimal effort. 4/ Offer a discount for cash ↳ Give small discounts to encourage upfront payments. ↳ Reduce credit card or processing fees. 💡 More cash in hand. Happier clients. 5/ Diversify clients ↳ No client should represent more than 15% of revenue. ↳ Avoid dependency on a single source. 💡 Reduces risk and increases negotiating power. 6/ Get a line of credit ↳ Use it as a buffer for operating expenses. ↳ Don’t rely on it for growth. Only for timing gaps. 💡 Smooths cash crunches and keeps operations running. 7/ Build recurring revenue ↳ Offer subscriptions where possible. ↳ Convert repeatable services into predictable income. 💡 Predictable cash = less stress and more planning ability. 8/ Leverage your portfolio ↳ Use existing assets as collateral for liquidity. ↳ Access short-term funds without selling assets. 💡 Unlock cash quickly while retaining control. 9/ Master cashflow basics ↳ Track inflows and outflows weekly. ↳ Know when shortfalls may hit. 💡 Early visibility prevents crises before they happen. 10/ Diversify offerings ↳ Multiple products or services reduce dependency. ↳ Test new revenue streams without risking core business. 💡 Upside: Strengthens resilience and long-term growth. Cash is not about revenue alone. It’s about control, predictability, and freedom to act. Which of these cash strategies is missing in your business right now? ♻ Repost if this helped. ✅ Follow Kinza Azmat for posts on growing, leading, and scaling a business.

How Treasurers Can Unlock Cash Through Netting & Pooling In an environment of higher interest rates and tighter credit, the best liquidity is often the one you already have. Yet many organizations still borrow externally while trapped cash sits idle across subsidiaries and currencies. That’s where netting and pooling come in, two of treasury’s most underused tools for internal liquidity optimization. Here’s how leading treasurers are using them to fund growth internally, reduce external debt, and improve cash visibility. 1. Start with visibility. Before designing a netting or pooling program, map who owes what, where, and in which currency. A 360° view of intercompany balances, FX exposures, and timing mismatches reveals the real opportunity. 2. Choose the right mechanism for your organization. Netting centralizes intercompany settlements by offsetting payables and receivables to minimize FX and transaction costs. Cash pooling consolidates balances physically or notionally across entities and currencies. 3. Design with tax, legal, and banking alignment. Netting and pooling are powerful but only if they’re compliant. Engage tax and legal early to define participation rules, ownership of funds, and interest allocation. Align with your banks on structure (physical vs. notional pooling, multicurrency support, interest set-offs). 4. Automate the engine, not just the math. The real gains come from automation. A good TMS can:  Calculate and post intercompany settlements automatically. Integrate with ERP for real-time balances. Handle multi-currency conversions at agreed rates. Automation reduces manual effort by up to 60% and enforces discipline in funding cycles. 5. Treat it as a liquidity strategy, not an accounting process. Treasurers use netting and pooling to: Free up 5–10% of trapped cash. Reduce external borrowing by 15–25%. Simplify FX settlements and lower bank fees. It’s not just process efficiency but it’s capital optimization. When liquidity works harder internally, the balance sheet gets stronger externally.

During a donor audit/spot check for an NGO project, something unexpected happened. The organization had done great work in the community. Water points were constructed, training sessions were conducted, and lives were observably transformed as a result of the organization's excellent work in the community. But when auditors asked for bank reconciliation statements, no one could locate the backup for two months. Why⁉️ The finance officer had left. The passwords for online banking had not been transitioned. And the project’s funds had been kept in a shared operational account instead of a designated donor account. There were no signs of fraud, just poor financial housekeeping. But the result‼️ The organization's reputation suffered, and community activities ceased for three months as a result of the donor withholding the next fund payout. 
Some Common Risks of Poor Cash and Bank Management in NGOs 🚨 Loss of donor confidence
🚨 Audit findings or qualified opinions
🚨 Internal fraud and misuse of funds
🚨 Project delays or canceled programs
🚨 Breach of donor/grant terms
🚨 Poor financial decision-making due to inaccurate balances Ways to mitigate some of these Risks 1️⃣Make sure all accounts are reconciled on a monthly basis by conducting monthly bank and petty cash reconciliations. There are no exceptions. Sign-off and review ought to be required. 2️⃣Ensure segregation of duties and keep track of who starts, authorizes, and documents cash and bank transactions. 
 3️⃣Have dedicated Project Accounts: To prevent fund mixing, open distinct bank accounts for donor-specific or restricted funding. 
 4️⃣Having clear cash management policies: Restrict the use of cash. Establish clear guidelines and approval procedures for financial advances and petty cash if possible. 
 5️⃣Timely Signatory Updates: When employees depart, make sure they receive timely updates. To avoid sole control, keep two signatories. Ensure proper hand overs are also carried out by exiting staff
 6️⃣Digital Access Controls: Strictly monitor permissions for internet banking. Remove former employees' access right away. 7️⃣Use accounting software instead of spreadsheets for manual tracking. When feasible, use systems that create audit trails, log access, and incorporate bank feeds. 
 8️⃣Conduct surprise cash counts and spot checks of bank reconciliations as part of routine internal reviews. 
 9️⃣Finance Team Training: Make a consistent investment in enhancing the finance team's knowledge of fraud awareness, cash controls, and donor compliance. 
 🔟Cash Flow Forecasting: Monitor anticipated inflows and outflows to avoid late payments and overdrafts. 
 ⏸️Document Everything: Keep thorough records of bank statements, reconciliations, payment vouchers, and approvals. 
Proper cash and bank management is not just about compliance. It’s about protecting impact, maintaining #donortrust, and ensuring financial integrity.

Million-dollar revenue, but cash flow chaos killing your growth? I saw it firsthand. A fast-growing eCommerce brand was bleeding dry not because sales were slow, but because AP was unmanaged. Here’s what we changed to flip the script: 1. Align AP to Cash Strategy We mapped payment cycles to revenue inflow. No more paying vendors before customers paid them. Result: +21 days added to their cash buffer without delaying a single payment. 2. Built a Tiered Payment Framework We ranked vendors by criticality and negotiated smarter terms. Priority vendors got paid first. Non-essentials went to net-45. Result: Freed up $280K in working capital within 60 days. 3. Added Visibility, Killed Surprises We replaced spreadsheet chaos with real-time dashboards. Every payment scheduled, tracked, forecasted. Result: Missed payments dropped to zero. The CFO finally slept at night. 4. Introduced Early Pay Incentives We paid strategic vendors early for discounts. Locked in 2% savings that added up fast. Result: $37K saved in Q1 alone. Straight to margin. The takeaway?   Accounts payable isn’t admin, it’s your cash flow throttle. Ignore it and you’ll keep running out of money at the worst time. I help finance teams turn AP from silent killer into a strategic weapon. DM “PayControl” if this sounds familiar. #accountspayable  #finance  #accounting 

Most of the SMEs I speak with do not have a dedicated treasury team. They have a CFO wearing multiple hats, a finance lead buried in the close, and a cash view stitched together from bank portals, spreadsheets, and whatever was updated last. That is not a criticism. It is how many companies grow. But treasury decisions are still being made every day. Someone is deciding when to convert FX. Someone is deciding which entity gets funded first. Someone is deciding how long receivables can sit before someone starts chasing. So the real question is not whether treasury exists in your business. 𝑻𝒉𝒆 𝒒𝒖𝒆𝒔𝒕𝒊𝒐𝒏 𝒊𝒔 𝒘𝒉𝒆𝒕𝒉𝒆𝒓 𝒕𝒉𝒐𝒔𝒆 𝒅𝒆𝒄𝒊𝒔𝒊𝒐𝒏𝒔 𝒂𝒓𝒆 𝒃𝒆𝒊𝒏𝒈 𝒎𝒂𝒅𝒆 𝒐𝒏 𝒑𝒖𝒓𝒑𝒐𝒔𝒆 𝒐𝒓 𝒃𝒚 𝒅𝒆𝒇𝒂𝒖𝒍𝒕. And that matters. Cash management and forecasting are now top priorities for treasury teams. At the same time, liquidity forecasting remains one of the hardest things to get right. That is exactly why lean finance teams cannot afford to treat treasury as an afterthought. 𝐂𝐞𝐧𝐭𝐫𝐚𝐥𝐢𝐳𝐢𝐧𝐠 𝐭𝐫𝐞𝐚𝐬𝐮𝐫𝐲 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐬𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐛𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐚 𝐝𝐞𝐩𝐚𝐫𝐭𝐦𝐞𝐧𝐭. It starts with three things. 1️⃣ 𝐎𝐧𝐞 𝐨𝐰𝐧𝐞𝐫. Not a committee. Not “finance” in general. One person is accountable for the cash position across entities and currencies. 2️⃣ 𝐎𝐧𝐞 𝐭𝐫𝐮𝐬𝐭𝐞𝐝 𝐯𝐢𝐞𝐰 𝐨𝐟 𝐜𝐚𝐬𝐡. If your cash position lives across bank portals, spreadsheets, and someone’s memory, you do not have visibility. You have a lagging estimate. 3️⃣ 𝐀 𝐟𝐞𝐰 𝐰𝐫𝐢𝐭𝐭𝐞𝐧 𝐫𝐮𝐥𝐞𝐬. When do you convert? Which entity gets funded first? How much runway must each entity hold? You do not need a 40-page treasury policy. You need a few rules that stop important decisions from being improvised under pressure. The goal is not to build a big-company treasury function. The goal is to stop running the treasury by accident. That is also why we think so much about cash visibility at Finmo. If one person is going to own liquidity across entities and currencies, they need one real-time view of balances, payments, and forecasts. Not a weekly spreadsheet chase. You do not need more people first. 𝐘𝐨𝐮 𝐧𝐞𝐞𝐝 𝐜𝐥𝐞𝐚𝐫𝐞𝐫 𝐨𝐰𝐧𝐞𝐫𝐬𝐡𝐢𝐩. 𝐁𝐞𝐭𝐭𝐞𝐫 𝐯𝐢𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐲. 𝐀𝐧𝐝 𝐚 𝐟𝐞𝐰 𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠 𝐫𝐮𝐥𝐞𝐬. What is one treasury decision in your business that is still being made by default? #Finmo #TreasuryManagement #CFO #CashManagement #SMEFinance #CorporateTreasury #CrossBorderPayments #FinanceOperations Akhil Nigam | David Hanna | Raj Vimal Chopra | Richard Oh | Anthony Yeoh, CAMS, CCI | Jonathan Lew | Mansi Chopra | Holly Fang | Joana Mikaela Liew

One of the simplest shifts I teach SMB owners: segment your cash into 3 buckets. Here’s why... “Do we have enough cash in the bank?” is the wrong question to manage your liquidity. One unexpected event, a delayed customer payment, a downturn, an acquisition opportunity, and you’re exposed. That’s why we coach clients to build a tiered liquidity strategy: 1. Operating cash. This is the cash you need to run day-to-day operations. It covers payroll, rent, vendors, taxes. We typically advise keeping at least 1–2 months of expenses here. Too little and you’re constantly stressed. Too much and you’re leaving money idle. 2. Emergency reserves. This protects against shocks: a major customer defaults, sales slow down, market shifts. For most SMBs, 3–6 months of fixed costs is a good target. 3. Strategic cash. This is your “offense” layer. Funds set aside for opportunities: buying a competitor, launching a new product, hiring a key executive. You’d be surprised how many companies miss out on great opportunities because they lack strategic liquidity. The key is to be intentional. Most businesses mix all their cash in one pile. That makes it hard to know what’s truly available for growth vs. survival. Segment it. Know your numbers. Build discipline around each tier. The companies that do this not only sleep better at night. They also move faster when opportunity knocks. Liquidity isn’t about having cash. It’s about having the right cash in the right place.