SHORT ANSWER · PROOF OF CASH
How is a proof of cash used in a fraud investigation?
In a fraud investigation, a proof of cash rebuilds what came in and went out of each bank account from the statements, month by month, and compares it with what the books or a party reported. A difference in receipts can point to skimmed deposits. A difference in disbursements can point to payments kept off the books.
THE METHOD
How does an investigator run one?
Statement by statement, then column by column. Choosing a tool? See the best proof of cash software.
- 1
Collect every statement for the period
Every account, every month. List what was produced before you reconcile anything.
- 2
Prove each statement
Opening plus every row must equal the printed closing. In Matter 25-117, March checking proves at 14,902.35 + 8,120.00 − 4,781.80 = 18,240.55.
- 3
Chain the months
Each closing must be the next opening. A break means a statement wasn’t produced.
- 4
Run the four columns against the books
Timing items such as deposits in transit and outstanding checks get their own rows. The steps are on how do you do a proof of cash?
- 5
Explain what is left
A difference that no timing item explains is a lead. The transactions behind it are where how to analyze bank statements for fraud picks up.
ZeraBooks builds the workflow around your matters and your template for free. No development charge, whether it’s a forensic department or one person.
A MISSING MONTH
What happens when a month wasn’t produced?
The proof can’t be done for that month. In Matter 25-117, checking closes March at 18,240.55 and opens May at 21,905.10. April was never produced, so 3,664.55 of net movement has no statement behind it, and that month’s receipts and disbursements are unknown.
ZeraBooks flags that break for you. It doesn’t detect fraud or score whether a statement is authentic. It proves what was produced and shows what wasn’t, which is the same reason why auditors use a proof of cash.
Is a proof of cash evidence of fraud?
No. It shows a difference. The investigator decides what it means after looking at the transactions behind it.
Can you do a proof of cash without the books?
You can compare the bank side with what a party reported, such as income on a return or a financial statement. The method is the same.
Does ZeraBooks read check images for this?
Yes. The number, date, payee, amount, memo and who wrote it go onto the statement line the check paid. A check with no matching line is listed for review.
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Prove what was produced.
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