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The secret to preventing an accounting mess of Tshwane proportions...

by , 08 April 2013
The City of Tshwane came back on accusations that it's not on a sound financial footing on Thursday in mayor Kgosientso Ramokgopa's state of the city speech. One way to avoid this is to make sure you have put effective accounting controls in place. The secret to this? Verifying quantities and amounts invoiced. There are two ways to do so...

City of Tshwane mayor Kgosientso Ramokgopa attempted to quell talk that the metro was in a financial mess in his state of the city speech last week.
This comes on the back of accusations of mismanagement, fraud and corruption in the city by the DA, says the Business Day's BDLive website.
It's easy to make sure your business doesn't face similar financial problems.
All you need to do is implement effective accounting controls. 
Here's why you need to implement effective accounting controls today
That's because payroll fraud alone cost South African organisations more than cash-in-transit heists in 2012, says FSP Business.
So the Practical Accountancy Loose Leaf Service recommends you apply internal accounting controls to your payroll system so you can prevent, detect and correct any mistakes at a glance.
Because it's not enough to just scrutinise your accounts every month to detect patterns that shouldn't be there, adds the Practical Accountancy Loose Leaf Service.
Luckily, there are two accounting controls you can implement today.
Accounting control 1: Pre-number all invoices and credit memos
It's also a good idea to make sure all invoices and credit memos are pre-numbered, says AccountingAisle.
If they're issued by a computer, you'll need to check that the detail is verified in the accounts receivable records.
This way you'll instantly see if there's been invoice duplication.
Accounting control 2: Reconcile your accounts receivable ledger to your general ledger!
Then, make sure your accounts receivable ledger is reconciled monthly to the general ledger.
This is a great way to verify quantities and amounts invoiced, adds AccountingAisle.
Bonus: If your is one of the 86% of businesses that prefer accounting audits to an independent review, implementing these internal accounting controls will help you prepare for your audit.

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