Segregation of Duties Matrix
Tick who does each finance task, from invoicing to bank reconciliation, and see where one person can both make and hide an error, with compensating controls for one- to three-person teams.
Built on the three lenses (Preparer, Verifier, Strategic Leader) in Dr. Michelle Gordon's guide, How to Tell If Your Financial Statements Are Accurate.
What is segregation of duties in a small finance team?
Segregation of duties means no single person can both make a financial transaction and hide a mistake in it. In practice that separates three things: recording transactions, approving or verifying them, and reviewing the results. Small teams often cannot fully separate them, which is acceptable as long as every overlap has a compensating control, usually a second person who looks at the evidence without having done the work.
How to use this tool
- 1
Add the people
Pick how many people touch the finances, one to six, and name each by role.
- 2
Tick who does what
Mark who does each of seven tasks, from invoicing and paying vendors to reconciling the bank and reviewing reports.
- 3
Fix the conflicts
See every incompatible combination, ranked by severity, with a compensating control for each one.
Small teams do not need more people, they need a second look
Dr. Gordon's three lenses are the Preparer, the Verifier, and the Strategic Leader. In her words: "These are distinct responsibilities, even when a small team must share them." And: "The goal is not bureaucracy. It is accountability."
The dangerous combination is initiate, approve, reconcile
One person who sets up a payment, approves it, and reconciles the account it left from can hide it from everyone. Break any one of the three links and the payment becomes visible.
Overlap is normal, unwatched overlap is the risk
A bookkeeper who pays vendors and reconciles the bank is common in a five-person company. The control is someone else reading the bank statement every month before the reconciliation is signed.
Bank portals already have the controls
Dual approval above a threshold and a second sign-off for new payees cost nothing and close the most common payment fraud path. Most small teams have them available and switched off.
The reviewer cannot be the builder
If the only person reviewing the financial reports also prepared them, the Strategic Leader lens is missing. An owner or outside accountant reading the package with fresh eyes fills it.
A matrix shows the gap, not what slipped through it
Mapping duties tells you where an error could hide. Checking whether one did means going through payments, journal entries, and reconciliations for the period. DataWyse gives the Verifier and the Strategic Leader direct, read-only access to the same ledger the Preparer works in, with every figure traceable to its source, so the second look does not depend on the first person's report.
See how DataWyse answers thisQuestions finance teams ask about this tool
What is segregation of duties in accounting?
Splitting financial tasks so that no one person controls a transaction from start to finish. The classic split separates authorising a transaction, recording it, holding the asset, and reconciling the account, so each step is checked by someone who did not do the one before it.
How do you segregate duties with only one or two people?
Use compensating controls. The owner receives bank statements directly and reads them monthly, payments above a threshold need a second approval in the bank portal, the owner approves each payroll run, and an outside accountant reviews reconciliations and journal entries each quarter.
What are incompatible duties in finance?
Combinations that let one person both create and conceal an error: setting up and approving the same payment, paying vendors and reconciling the bank, running and approving payroll, and posting journal entries while also reconciling the accounts they affect.
What are the three lenses of financial oversight?
In Dr. Michelle Gordon's framing they are the Preparer, who ensures transactions are recorded accurately and financial information is assembled; the Verifier, who reviews reconciliations, supporting documentation, and unusual adjustments; and the Strategic Leader, who evaluates financial results, organizational risks, and implications for decisions.
Does a conflict mean someone is committing fraud?
No. Almost every small finance team has overlaps, and most are run by honest people. A conflict means the process would not catch a mistake or a problem if one happened. The compensating control is there to protect the person as much as the company.
Is this tool really free?
Yes. No signup, no email required, no usage limit. It runs entirely in your browser: nothing you type is uploaded to a server or stored anywhere. We build these because the people who find them useful are the people who eventually need a financial analyst that works the same way.
Related reading
- How to Tell If Your Financial Statements Are Accurate: 7 Questions Every CEO Should Ask Industry Expert · Dr. Michelle Gordon, CPA, CMA, CPHR, EMBA, DBA · 7 min read
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