Segregation of duties strengthens internal controls. Accounts payable or AP is one of the easiest channels for an organization to lose money if internal controls are weak. The AP department’s responsibility to monitor, process, and control payments to creditors is essential to avoiding improper payments. If there is no segregation of duties, internal controls are likely to be weak. If internal controls are weak, the risk of errors and improper payments increases.
Cut-off errors are common and it is important that you avoid them, particularly at year end when one fiscal year will be closed and finalized for the external audit or as a precursor to starting the new fiscal year.