C. RECEIPTS AND BANKING
One of the first lessons that I learnt in life was that when you pay for something, you expect a receipt. Aren’t you often suspicious of a person behind the till who has just taken your hard earned cash for something that you have purchased, and he/she doesn’t look like they have put it through the till properly and there is no receipt forthcoming? It is one of the basic rules of bookkeeping, particularly if the transaction has been conducted in hard, cold cash and it also is one of the saviors of human folly! By issuing a receipt for money received, you are protecting the client (or the person who gave you the money), you are making life easier for your Bookkeeper/Accountant and you are providing an audit trail for anyone who needs to have one – you have nothing to hide. It is advisable to either have one person issuing receipts or alternatively that each person issuing receipts be in control of their own receipt book that has to be balanced back to the money received for the day. This will take a little planning, but once done will only take a few moments a day to reconcile. If you need a copy of what a receipt should look like please contact me and I will supply one to you at a cost.
1. Receipts should be made out as soon as the money and/or transaction has taken place. The receipt should have the name of the Company recorded on it, the date that the payment was received, the amount that was received (both in words and in figures). The name of the person and/or Company that paid the money in should also be recorded as well as the name and signature of the person who received the money. Whether the payment was made by cash, cheque or electronic means should also be indicated. The receipt should also have the invoice number recorded on it for ease of reference. This will assist the Bookkeeper/Accountant in reconciling the deposit book/bank statements back to the type of payment made and then back to the invoices. For reference sake, it might be a good idea to list the receipt numbers issued for the day on the deposit slip. It will also provide a clear trail as to what transpired.
2. When a receipt is cancelled for whatever reason, it should be clearly marked as “cancelled” and the date, on all of the copies. The original copy should be retained and attached (stapled) to the office copies, otherwise there is no proof that the transaction has in fact been cancelled and will not be worth anything in a court of law.
3. To ensure that duplicate receipts have not been issued to someone other than by the person writing out the receipts, you should check the receipt book to the deposit slips and/or bank statement and sign that it has been checked and that it is correct.
4. The receipts should be properly printed pre-numbered books. That is not to say that you have to go a get a whole bunch of pre-numbered receipt books printed with your Company or business logo and the whole shebang on it. The ones that you buy from any stationary shop are more than adequate. So that they cannot be confused with anyone else’s receipts – your Company or Business Unit stamp should appear on the original copy of the receipt. You can take this one step further and personalize the receipt – instead of boring old receipt # 001 you can add for example IA-001 (Internal Audit - 001) and so on. In this way your receipts will not be confused with anyone else’s. For those of you who have bookkeeping software, your computer should be able to produce an electronic receipt – you just have to set it up with the logo etc that you want or alternatively print it on Letter Head paper. It is advisable to have 3 copies of the receipt either written out or printed. The original to go to the Client, the second to go to the Bookkeeper/Accountant and one to remain in the office as your own proof.
5. It is a good idea to have a register of receipt books, particularly if there is going to be more than one person handling receipts at a time. This should be updated as and when receipt books are handed out. All unused receipt books should be kept under the control of a responsible person, other than the person issuing receipts. You cannot do a check on yourself! Well you shouldn’t have to at any way as it is like lying to yourself. Receipt books in use should be kept securely locked up by the person issuing those receipts – remember you are responsible for that receipt book! It’s no good signing for a receipt book and signing for the responsibility of that receipt book and then leaving it lying around for anyone (including a customer) to use and misuse. Use your common sense – if it has anything to do with money – lock it away!
Someone other than the people issuing receipts should also verify the receipt books on hand from time to time and this should be evidenced on the spread sheet.
Someone, other than the people issuing receipts should also verify that the receipts have been used consecutively and that all the receipt numbers are accounted for and that all the receipts either appear on the deposit slip and/or on the bank statement.
In the instances, where the business is big enough to have a cash office, where all the cashiers are housed, security needs to be of paramount importance. This is not only to ensure that the money is safe, but also to ensure that the staff are in no danger! Take a look at the banks. In most instances the tellers sit behind bullet proof glass – believe me it is not like that just to make it difficult for you to hear them! It is for their protection and for the protection of your money. Now I am not suggesting that you rush out and buy bullet proof glass for your office at home because you may be keeping cash/cheques etc there that you may want to be kept safe! What I am saying is that you should use good old fashioned common sense. Make sure that your security is adequate for your needs.
6. If a cheque that has been paid to you, is returned for whatever reason (post dated, stale insufficient funds etc), make sure that the cheque is returned to yourself and not the cashier that issued the receipt – this is to keep the admin functions separate. The receipt should then be reversed, with a detailed explanation and the client should be contacted and advised that the cheque has been returned and suitable arrangements made for the re-issuance of the cheque is to be made. Please remember that the bank will charge you for a cheque that has been returned, remember to pass this cost onto the client as well, as it can be in excess of R80.00. This also needs to be followed up until such time as the funds are received again. I would suggest some sort of book or notes be made, that can be kept in a file in order to keep a detailed log of what transpired.
7. When receiving cheques as payments, take the time to have a quick check. The date must be current – by that I mean it cannot be more than 6 months old or it will be considered stale, (unless otherwise stated on the face of the cheque). It cannot be post dated – if it is you will have to wait until the due date on the cheque to deposit it. The amount in words and figures must correspond. The cheque must be signed. The cheque must be crossed with the words “NOT TRANSFERABLE”. There cannot be any alterations and/or amendments. If there are any problems with the cheque and you deposit it, the bank will return it and they will charge you for the privilege. So rather be safe than sorry, make sure that the cheque is in order.
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