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By Jim Starks, CFuE, CCrE

Establishing and ImplementingOffice Controls as Effective Tools toCombat Loss of Income, Theft, and

Employee IssuesOffice controls are important tools that provide a checks and

balances system to protect your families and your business.Many establishments adhere to the saying why fixwhat's notbroken, and they continue to do things the way they've alwaysbeen done. But even if your office controls are not broken,they could be obsolete if you have not made changes in recentyears.Some of the areas that should have controls in place to re-

duce your firm's risk ofloss include:Pre-need• Pre-need contracts should be pre-numbered and issued

to the person who is writing the pre-need. Establish andimplement a process to track voided contracts. Withoutsuch a procedure, contracts can be issued without beingprocessed; because the sale is unaccounted, the sales per-son can discretely keep the money.

• Contracts should be reviewed before processing and com-missions are paid. Verify that the proper price was chargedfor merchandise and services,the FTC disclosures are com-pleted, the contract is signed by both the purchaser and thefirm's representative, and cash advances are guaranteed.

Maturing Pre-need (fulfillment of pre-need contracts)• The servicesprovided should be the same servicesprovided

for when the original pre-need contract waswritten. VerifYthat additional serviceswere not added without collectingadditional revenue.

• Contracts should be reviewed before processing.Verify thatihc proper price was charged f()I'merchandise and services,P'J'(: di~('Io.~liI'(·s,II'l'(,()llIp\~'I~·d,tilt' l'OlIll.l(1 is siglln\ hy

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both the purchaser and the firm's representative, and additionalrevenue was collected on non-guaranteed items.

• Monitor the length of time it takes for the maturing pre-heedcontract to be submitted for payment. Each day involves acost to firms.

At-need• Contracts should be reviewed before processing. Verify that

the proper prices were charged on merchandise and services,FTC disclosures were completed, and the contract was signedby both the purchaser and the firm's representative. .

• The expected date and method of payment should be docu-mented on the contract so both the purchaser and the firmare cognizant of the payment's due date.

• Require computer-generated contracts to eliminate unneces-sary mistakes and enhance professionalism.

• Establish and implement a standardized procedure regardingwhen the first statement is mailed and how it is documentedif the contract is not paid in full at time of need.

Petty Cash• Petty cash should be reconciled frequently. Someone should

review the expenditures after the, reconciliation process iscompleted.

• You should have receipts for all expenditures, along with doc-umentation regarding what they were for.

• Petty cash should be kept in a secured location where it is notaccessible to everyone.

Payroll• Signed and dated time sheets or cards should be submitted

by all employees.• Accurate hours must be submitted by the employees. A com-

puter-generated time clock ensures accuracy.• If the owner is not submitting the hours that employees are

paid for, a review process should be implemented and estab-lished to see if the hours submitted by the employee are thesame as they-are being paid.

• Payroll records should be kept in a locked and secured area.Cash Disbursement• You should have documentation for all expenditures.• Checks should be kept in a locked and secured area.• TIle check register should be reviewed monthly to verily that

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• Establish and implement a standardized procedure regard-ing accounts with unpaid balances, including how oftenstatements are sent, where copies of mailed statements arekept on file, and where notes are created and kept regard-ing phone calls on past due accounts teceivables.

• When payments are received, the following duties shouldbe separated:• Only one receipt book with hand-written sheets

should be issued.• Payments should be entered into the computer the

same day as payment.• The deposited bank slipshould be compared with the

receipt book for consistency. Copies of checks andcash should be made before depositing such items.

• The money should be taken to the bank in a time-lyfashion.

• Establish and implement a procedure regarding how of-ten accounts receivable are reviewed.

Loss of income, theft, or employee problems can developin all of theabove areas.Although some general assumptionsand locale may affect these issues slightly, the main concernis to reviewyour operations and develop your officecontrolsto best reflect the level of risk you are willing to assume. Inthe event that state rules and regulations are different thanwhat is listed above, you must follow your state's policy.

Jim Starks. CFuE, CCrE, is President of J. Starks Consulting inLutz, FL, and a nationally-recognized trainer on funeral home andcrematory risk management.He used his experience in both funeral home and crematory op-

erations and risk management, combined with his involvementwith funeral homes of all sizes and geographies, to become anauthority at controlling risk and loss in the death care industry,providing lectures and presentations to private firms, as well as re-gional, state and national associations. He also conducts privateaudits and risk assessments to independent funeral homes andcrematories in the US and Canada, often identifying ways to saveor generate thousands of dollars of profit.Jim is a Michigan and Indiana Licensed Funeral Director and

Embalmer and ICCFA- and CANA-certified crematory operator, aswell as Dean of ICCFA University'S College of Cremation Services.He is a graduate of the University of Wyoming, the Mid-AmericaSchool of Mortuary Science, and the ICCFA University For moreinformation on risk management in the death care industry, vis-it jstarksconsulting.com. Contact Jim at (813) 765-9844 or jim@jstarksconsulting .com,