Who may commit the business.
WHY LIMITS MATTER
They determine how much damage a single decision can cause.
WHAT TO ESTABLISH
Who may approve what, and up to what amount.
WHAT TO COVER
Purchases and payments Contracts and commitments Credit granted to customers Discounts and write-offs Recruitment and salary changes Disposals of assets Borrowing
WHY DISCOUNTS AND WRITE-OFFS DESERVE LIMITS
They give away value without any money moving, so they attract less scrutiny.
WHAT TO ESTABLISH
That write-offs require approval and explanation.
WHAT TO DOCUMENT
The limits, and communicate them.
WHY DOCUMENT
Undocumented authority is assumed, disputed and exceeded.
WHAT TO ESTABLISH ABOUT EXCEEDING LIMITS
That it requires the next level, with no exceptions.
WHAT TO WATCH FOR
Transactions structured to stay within a limit.
WHAT TO ESTABLISH ABOUT COMMITMENTS
That contracts binding the business require appropriate authority.
WHY
Individuals commit businesses to obligations nobody approved.
WHAT TO ESTABLISH ABOUT BANK MANDATES
Who may operate accounts, and whether more than one signature is required.
WHY DUAL AUTHORISATION
It prevents a single person moving money alone.
WHAT TO SET IT AT
A level that provides protection without paralysing operations.
WHAT TO REVIEW
Mandates, whenever anyone leaves or changes role.
WHY
Former staff remaining as signatories is common and serious.
WHAT TO ESTABLISH ABOUT DELEGATION
That authority delegated during absence is documented and temporary.
WHAT TO RECORD
Every approval, and by whom.
