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Prepare and process documents for financial and banking processes (13932)

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All cash receipts that are deposited or received in the bank account that will increase the bank balance should be entered into the cash receipts journal. Where the bank account is in an overdraft, where money is owed to the bank, deposits may decrease the overdrawn bank balance.

Cash transactions may be defined as all monies that are received in bank notes and coins, cheques, credit cards, money orders, bank transfers, etc. The basic source documents are a receipt or deposit slip. You may find that there may be no deposit slips for money paid directly into the bank account by customers or third parties or for bank transfers.

When receiving money, the first thing to do is to issue a receipt and hand it to the customer or party from which the money is received. If a cash register is used, the till slip is the receipt for the customer. At the end of the day the float and the total sales should be reconciled. All the cash must then be regularly deposited into the bank account. There are several considerations that have to be taken into account to decide when moneys received can be deposited. The ideal is to deposit on a daily basis. Some of the issues are the following:

  • Cash flow if there is sufficient money in the bank account at the bank to honour the payments and debit orders.
  • Cheque receipts from certain customers may be returned as dishonoured, since they may have no money in their bank account when you decide to bank money or for some other reasons.
  • Safety precautions in place.
  • Any other considerations to meet your requirements.

Deposit slips may be obtained at the bank counter. The bank may issue a pre-printed deposit slip with the business details, account number and deposit number on it. Deposit slips are normally filled in duplicate or triplicate and handed to the cashier. The bank teller will count the cash and cheques, etc., enter the bank stamp, tear out the original, and hand one copy back. In the case of a deposit book, the book with the book copy will be handed back.

The basic information that must be entered on a receipt is the following:

  • Date of the receipt.
  • Received from whom.
  • Amount in words and in figures.
  • For what the money is received.
  • Additional information that may be required is the payment method, whether by cash or cheque, etc. and the amount for discount allowed if any.

The basic information that must be entered on a deposit, is the following:

  • Date of the deposit
  • The business name and bank account number (if not already pre-printed).
  • The total amount in figures for the cash, money orders, etc.
  • The name of the drawer, bank and branch as well as the amount. (Each cheque should be individually listed).
  • The total amount of the deposit, including the cash, postal orders and cheques.

You would record the deposit number, date of the transaction, details of the transaction, the debtor or other applicable ledger account, Input VAT (if you are registered for VAT) and the amount you have issued the deposit for – including or excluding VAT, depending on your requirements.

All the receipts on the same deposit slip must have the same reference number. This is very important. If this is not done, bank reconciliation will be difficult, if not impossible. For example, On the 16th of March, we have two receipts deposited on the last deposit slip. In this case, we use the same reference number (e.g. D5001) to enter both the deposit transactions on the same deposit slip. After entering the deposit slips, you need to balance the transactions. Capture the Deposit slips or Receipts. The above is an example of deposit slips obtained from a bank. You may have pre-printed deposit slips, which may be pre-numbered and of a different appearance, but the information on the deposit slips are basically the same.

It is important that no cash received is used to make payments. If the internal control over the cash received is unsatisfactory, it could be a nightmare to reconcile and find any cash that has disappeared. To use cash for payments, the petty cash can be used to make cash payments