The upshot is there is now more emphasis on is the bank reconciliation review process, with smaller organizations now involving the Treasurer and/or board in reviewing the bank reconciliation.
     Industry accountant Iris Moellenbeck says the company's auditors still require the written approval of two people on every payment, even though cheques are no longer issued. In this case, the written approval can be electronic (like an email) BUT the approval has to come directly from that signatory's email account. This means it is not acceptable if the receptionist, for example, forwards his boss's approval to the organization. In my view, that safeguard also makes sense.
     For her NFP clients, bookkeeper Heather Lyon says the board reviews a monthly variance report to budget. The bookkeeper makes the EFT payments and the documentation is initialed by the manager and a board member for each transaction (these are the people who would normally sign the cheque). At month end, the treasurer reviews and signs the bank statement and reconciliation report. At end of the fiscal year, a committee does a thorough review of the books and documentation (i.e., an audit or review engagement process). Many NFPs are now also looking at setting a purchase limit that would require prior authorization (i.e., delegations of authority).
     So it seems that our long standing policy of two signatures on cheques never really was all that effective and that nothing replaces due diligence at the payment approval process. Now we also have to expand the circle of who sees the bank reconciliation (and signs off), but I think this will be a modest inconvenience for a better engagement in the process.
     What steps are you taking with the phase out of cheques?