Cash Management Matrix

CheckPoint: Cash Management Matrix

Use Appendix B. For each principle in the matrix, describe how the principle ensures the
reliability of a company’s financial statements and provide at least one example of how the
principle might work in a real company. Do not use examples from your text.

Post Appendix B as an attachment.

Axia College Material

Appendix B

Cash Management Matrix

Directions: Using the matrix, list how each of the principles of internal control works, and give an example for each. Next, list how each of the principles of cash management works, and give an example for each. 

Principles of Internal Control	How it Works	Example
Establishment of responsibility	Establishment of responsibility means you are established with a certain responsibility.  You have the responsibility for a certain duty.	Such as the mail carrier delivering your mail, or when your boss designates you as the individual responsible for booking all his appointments and keeping track of them.
Segregation of duties	Segregation of duties is when more than one individual works together to achieve a task.	Such as when a collection team works together to call on late payments.
Documentation procedures	Documentation procedures are when you have a list of the way a certain document needs to be handled	Such as H & R block fills out your taxes for you.  They have a certain way the documents need to be handled, and it needs to be in the correct way every time.
Physical, mechanical, and electronic controls	Physical, mechanical, or electronic controls are items that have a physical presence that need people to manipulate them in order for them to work.	Such as cash registers, safes locks or bank vaults.
Independent internal verification
Other controls

Principles of Cash Management	How it Works	Example
Invest idle cash	Investing idle cash means to use cash that is not making a profit on itself and put that cash into something that will.	Such as buying shares of a company with cash in your savings account.
Plan the timing of major expenditures	Planning the timing of major expenses means to purposefully manage when you will use a large amount of cash to correspond to when you the expenditure is the most helpful and least hurtful.	Such as when you plan to hire more employees during your busy season.
Delay payment of liabilities	Delaying payment of liabilities is when you put a debt in a structure of payments.	Such as making a payment plan for the equipment upgrade you want to buy or have bought.
Keep inventory levels low	Keeping inventory levels low is a way of ensuring you are only spending what you need, never having an overabundance of materials you do not need or can use in a reasonable amount of time.	Such as office supplies, buying a small inventory to keep on hand without making frequent store trips but not so much as to overspend your budget.
Increase the speed of collection on receivables	Increasing the speed of the collection of your receivables means causing your income to increase in some way.	Such as having a sale to draw in customers, or spending more time and/or energy calling for late payments.