How Segregation of Duties Protects Your Business

In small businesses, it’s common for one person to wear multiple hats, but when it comes to handling money, that can lead to serious risk. Segregation of duties is one of the most effective internal controls you can implement to reduce the potential for fraud, errors, or oversights.

At MCAC, we help companies design realistic safeguards that match their size and structure. Here’s how segregation of duties works and why it matters.

1️⃣ What Is Segregation of Duties?

It means dividing responsibilities so that no one person has complete control over all aspects of a financial transaction. For example, the person who writes checks shouldn’t be the same person who reconciles the bank account.

2️⃣ Why It’s So Important

Without separation, it becomes easier for mistakes or intentional fraud to go unnoticed. Segregation creates checks and balances that protect your business and improve transparency.

3️⃣ Common Areas to Separate

- Cash handling vs. recordkeeping

- Check writing vs. bank reconciliation

- Approving purchases vs. entering transactions

- Payroll entry vs. review and distribution

4️⃣ What If You Have a Small Team?

Even solo entrepreneurs can adopt basic controls, like using software with approval workflows or having a third party review monthly reconciliations. We tailor solutions to your reality.

5️⃣ How MCAC Can Help

We assess your current structure, identify risk points, and recommend practical ways to divide duties, even in lean organizations.

You don’t need a big team to build protection into your business. With the right internal controls, you gain security, accuracy, and peace of mind.

📞 Want to reduce financial risk without adding headcount? Let’s find a system that fits.