A Simple Way to Get Reacquainted with the Business

A Simple Way to Get Reacquainted with the Business

Recently, I have been having conversations with clients on how they need to get back in touch with what is going on with and in their business.  Below is a simple methodology on how to get back in touch.

Sign all the checks the business issues!

Yes, it is that simple.  Sign the business’s checks and you will know where the money is being spent and on what.  This means destroy any signature stamps, signature plates and electronic signatures.  Stop all ACHs or autopayments on credit cards.  Now, do the most important thing you can do to get back in touch with your business; get a pen, sit down at your desk, review the backup supporting the check to be signed, ask questions related to payments about to be made and then if everything is alright sign the check and return everything to the accounting department for mailing.

If you have a question about the expense that is being paid, for any reason, put the unsigned check and backup off to the side and ask the accounting department to answer your questions before you sign the check.  An unintended consequence of reviewing and signing checks is that it requires those that are preparing the checks to be better informed on the reasons for the check and can answer any questions related to the payment.  That means everyone that has authorization to commit the business’s financial resources will know there is a C-suite executive reviewing checks, which will filter down to employees to watch how they spend the business’s money too.

Make sure that when you are signing all the checks that there is proper documentation with each check to review and document the purpose for the check.  Proper documentation would be a purchase order (if the business issues P.O.s), actual vendor invoice and an actual signature on the invoice from the manager that authorized the expense.

The whole process should take around an hour week, depending on the size of the business and the volume of checks issued.  If the business is on the large size, I recommend that you have a requirement that checks over a certain limit require two signatures, while having the initial check reviews done by a high level manager and the second signed by a C-suite executive.

The real economic issue is how the business is spending its cash, does the business have enough cash currently and enough cash forecasted to outlast how long it will take for the economy and the business’s customer base to return to some semblance of normalcy.

Start signing the business’s checks now and get back in touch with the business!

 

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