Part 1 of a 3 part series

Warning Signs:

• Significant decrease in working capital.
• Significant decrease in current ratio.
• Significant decrease in quick ratio.
• Sudden unexpected decrease in cash.
• Cash below projected levels.
• Delay in paying bills.
• Lost cash discounts.
• Excessive bank charges.

Steps to Improve: PREVENTING LOSS

• Limit check signing to a person who controls cost, but does not do bank reconciliations.
• Open the bank statement and skim transactions, or control by budget exception.
• Sign all checks or receive photocopies of all signed checks, where practical.
• Start signing all checks personally.
• If you can't sign all checks, sign all those over a fixed amount.
• Keep unused checks and checkbook under lock and key.
• Watch out for unsound banks.
• Be sure the funds in the company's banks are within the federally insured limits.
• Guard against losses from employee theft.
• Institute strict check acceptance procedures.