Unfortunately, headlines such as “Town Financial Auditor Accused of Stealing Thousands” or “Nonprofit Leader Allegedly Pockets Donor Money” are common. These crimes are ones of opportunity – people are able to walk off with money if it isn’t being properly tracked.
Despite all of this, many governments and nonprofit cash management efforts are outdated and ineffective. However, by using an electronic cash management solution, the chances of fraud would diminish significantly. Here are three ways that electronic cash management solutions can help prevent fraud:
Electronic cash management solutions deter money handlers from pocketing money: One of the easiest ways to commit fraud through cash management is by taking cash during the process of repeat payments, since the missing cash is far more likely to go unnoticed than during one time payments. By then writing bogus manual receipts, it can be very difficult to detect the missing cash.
By using cash management services through companies such as Zobrio, the payment is automatically recorded in the computer system once it reaches the intended destination, eliminating the opportunity to steal cash.
Electronic cash management solutions provide a proper paper trail throughout the entire process: Throughout the cash management stage, the transaction can go through the hands of many people. A payment may go first to a manager who then sends it through an auditor at the bank, who then turns it over to the final recipient. Needless to say, it is very easy for the money to get lost in that process if people aren’t incredibly careful.
By using a service such as Zobrio Cash Management, a robust audit trail is devised to prevent money “disappearing” throughout the different stages. These transactions are given both payment and deposit numbers that are easily accessible at any given time.
ALSO: Cash management can track other issues in the audit trail besides outright fraud – it can also track all sorts of ways that money gets lost through the system. Simply put, these tools can help make sure every penny is accounted for throughout all stages of the transaction.
Electronic cash management solutions provide easy access to oversight: Per the second point, by making sure cash management is done electronically, you provide an avenue for government regulators, financial auditors and other key stakeholders to easily access financial records. If some part of these cash transactions raise question marks, access to the audit trail is readily available, providing more robust oversight compared to manual cash management.
To request a demo of Zobrio Cash Management, feel free to contact us.