(i) Cash
• The hardware shop should ensure that the persons dealing with cash arc trustworthy,
competent and well trained in their duties.
• Only specific persons should have the responsibility of receiving cash from customers.
There should be clear reporting lines of those cashiers within the organisation.
• An appropriate method of recording the cash collected should be put in place in the
retail hardware shop such as the use of cash registers to record the receipts. Further, a
computerised system that will be able to record the cash collected and issue a receipts
to the customer should be installed.
• At the end of the day, cash count should be carried out by an independent person in the
presence of the cashier. The physical cash should then be reconciled to the expected
amount as per the cash register record. Any variances should be investigated.
• The cashiers should be supervised and surprise cash counts should be carried out by the
supervisor
• The cash collection should be kept in a safe/key and lock system.
• Money should be baiiked regularly, say on a daily, basis by an independent person.
• Physical security measures such as employing police guards should be put in place.
• Rotation off staff/cashiers
• The recording of the cash receipts in the ledger should be done by an independent
person.
• Approval of payments by a responsible person.
• Monthly hank -reconciliations should be prepared.
• Taking indemnity insurance cover.
(ii) Controls over inventory
• having stock policy e.g re-order level set, EOQ etc
• An appropriate inventory system should be put in place. This should be able to capture all
stock purchases and update the stock balances with every sale made.
• Checking the slow moving inventory regularly.
• All stock items should be properly coded.
• All stock purchases should be accompanied by goods received note that is used by an
independent persona to update the stock records with the receipts.
• All issues of stock from the store to the shop should be authorised by a senior person and
the stock movement updated in the inventory system.
• There should be adequate documentation of all stocks returned back to the store or
warehouse. The stock records should be updated with such returns.
• Take insurance policy for stocks.
• Proper acquisition procedures e.g approvals by the responsible person.
• Investigation on the stock variances.
• Inspection of the movement of stocks.
• On a monthly basis a stock count should be conducted. They physical stock counted
should be reconciled to the expected stock as per the inventory system.
• Closed circuit TV cameras should be installed to deter and detect shop lifting
• Unauthorised persons should not be allowed into the shop premises, Security measures
should be put in place to ensure that employees do not carry out stolen items when
leaving the premises e.g. inspection locks.
• Stock write offs should be authorised by a senior responsible official.
Kavungya answered the question on May 14, 2019 at 12:59
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