It is important to separate employee duties in a business as it can help safeguard your assets, among many other beneficial components. Separation of duties can help you place internal controls over your company’s assets. Separation of duties can help you practice bookkeeping more efficiently and effectively as it prohibits the allocation of responsibilities to one person. It helps the internal security as well. Ensuring that your sensitive data stays secure. The separation of duties will not only help you, but it will also help your employees. You will need to separate duties to stop your business from having a high turnover rate. A high turnover rate is when employees constantly quit, resulting in multiple new hires. This, in turn, becomes a repetitive cycle. Don’t worry! You can stop this from happening.
Application in general business and accounting
In general business and accounting, the segregation of duties serves two key purposes. These purposes include assurance that you can review and catch errors easily if there is an oversight and prevent theft and fraud. Separation of duties is an essential phenomenon as it involves the separation of three main functions:
1. Custody of assets
2. Authorized use of assets
3. Keeping records of assets
Although separation of duties is difficult to achieve in small businesses, it should be implemented as much as possible to improve the performance of the employees in the organization. When your employees are satisfied and performing well, you will see the business start to flourish if it isn’t already.
Application in information system
Business owners never want fraud to occur in their company. However, it can happen when a single person handles more than one step of the transaction style. This often happens in small businesses as there aren’t many employees. That is why it is essential to set clear roles and responsibilities for each job. This gives employees a thorough list of the tasks they are expected to do when they should perform them, and who will review their work. It plays a pivotal role in the accountability of employees. Without various levels of accountability, even the best organizations can be rendered meaningless. By separating the duties of employees, work performance is enhanced. Business owners should separate the responsibilities of each employee so that their skills can be polished and to deter the staff from committing fraud.
When this process is implemented, the credibility of accurate financial reporting is vastly increased. This reduces the risk of fraud as it assures the creation of a culture of accountability. It protects the business from any unnecessary or unplanned loss. Separation of duties can increase efficiency towards the aims and objectives of an organization. This assures that your employees are not burdened with huge workloads, and you are providing a stress-free environment. Involving multiple employees in a single task can prevent any type of potential error. Involving more than one person in the transaction cycle can prevent one person from gaining complete control over a single process. Therefore, the opportunity for fraudulent behavior is reduced.
All in all
The separation of duties is a vital step in running a business. Having a big workload can be overwhelming. Spreading out tasks amongst employees will help alleviate stress in the workplace. This will help the success of your business overall. It can be a difficult task, but with help can be easy! When you hire a new employee, consider making them a pamphlet. This pamphlet would have a detailed list of duties expected from that person. With this information, you are now ready to start separating duties among your employees!About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.