Adding Dual Approval to the Payment Process for Better Financial Management

Jan 18, 2024
Adding Dual Approval to the Payment Process for Better Financial Management

When the bookkeeping for a growing business starts to become complicated or time-consuming, it also becomes more prone to errors and oversights. When payments are late or missed, when invoices are not promptly documented, and when money goes unaccounted for, it may be time to revamp the system for accounts payable and implement dual approval for transactions. Adding a second pair of eyes to the process for approving payments and money transfers can help reduce errors and fraud, as well as add accountability to the financial management.

If your bookkeeping has become sloppy, neglected, or prone to inaccuracies over the last year, the financial management process may benefit from adding a dual approval to payments so that an initiated payment must be approved by a second party before it can be completed.  Consider some benefits businesses have found by adding approval to the payment process.

A second pair of eyes on the books         helps to:

Improve accountability

Internal controls enhance security by adding an extra layer of accountability and transparency to the bookkeeping, which is especially important for companies that require multiple people to access the funds. Approval processes should be well-designed and implemented so that you don’t end up with a system that has too many steps, which will slow down the process and ultimately create a cumbersome backlog. Authorization processes should be as simple and streamlined as possible, with both parties understanding the system and working in tandem to get payments submitted and authorized as efficiently and accurately as possible. Perhaps only certain types of payments—or payments over a certain amount—need secondary approval. A dual approval process helps better prepare you for those occasions when your payment is being questioned or disputed—you have a record of authorization and signatures to consult.

Reduce opportunities for fraud

Fraud is an ongoing problem for many businesses, and it is estimated to costs billions of dollars per year. Opportunities for internal fraud are greatly reduced and deterred when a second approval must be obtained for each payment issued. The payroll process can be an area particularly vulnerable to fraud and may benefit from a second party approving amounts and matching account numbers.

Help bookkeepers spot errors

Every process, no matter how well-designed, is prone to errors when humans are involved. Automating tools for financial management have greatly reduced many common errors in business accounting processes, but when mistakes do occur, it helps to have two people reviewing the records. Dual approval systems increase the chances that a mistake in amount, date, payee, or payment method will be spotted (before having to resort to a costly and time-consuming fix). It also helps prevent duplicate payments, late payments, and overpayments, as well as payments accidentally made from the wrong bank account.

Checkeeper can add approval to the workflow

Checkeeper is a widely-used online software that streamlines the check printing and mailing process. Checkeeper enables businesses to print customized, professional business checks on demand from anywhere. Checkeeper is a popular tool for bookkeepers, as well, and controls can be set by an account holder to grant or limit user permissions for optimal workflow efficiency. With Checkeeper, you can:

·       Set authorizations and user permissions for check access

·       Limit transactional authority

·       Identify the user who initiated a payment

·       Change controls as needed

·       Access and monitor the check registry from anywhere, 24/7, on any device you travel with

·       Authorize a virtual bookkeeper and monitor his or her transactions

·       Improve security by securely storing check templates and registries online so that you don’t have blank business checks lying around the office

Small businesses that employ only a few people often have tasks and projects for which multiple people must share the work, and systems for oversight are not always in place or rigorously followed. Adding an approval element to the accounts payable can help cut down on many common bookkeeping errors and reduce the chances of late or underpayment penalties. It also adds accountability and security to financial management. Checkeeper is an online financial management resource that offers cloud-based access to customizable check templates, and it can work within the approval process that you have in place for issuing payments.