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Cash Receipts Procedure

The cash receipts procedure shown below describes how to receive cash, process it into a bank deposit, record the receipt, and properly reconcile the receipts information. This procedure is extremely useful for ensuring that a company maintains a properly level of control over its cash receipts.

Receive Checks and Cash Through the Mail (Mail room staff)

1. Enter today’s date on a new copy of the mailroom remittance sheet.
2. Enter on the sheet for each check received the check number, customer name, the city and state from which the payment was sent, and the amount paid.  If cash is received, enter this amount in the “Source if not check” column.  Enter the grand total of all checks and cash received at the bottom of the Sheet.  Sign and date the Sheet.
3. Insert all checks and cash received, along with the completed sheet and a remittance copy, in a locking inter-office mail pouch and have it couriered to the cashier.
4. When the courier returns with an initialed copy of the sheet, showing evidence of receipt by the cashier, file it by date in a locking cabinet in the mailroom.

Prepare and Issue Deposit (Cashier)

1. Open the inter-office mail pouch from the mailroom containing the daily checks and cash receipts. 
2. Total all cash and checks received, and match the total to the total shown on the mailroom remittance sheet.  Investigate any variances.
3. Enter all checks received on a deposit slip, as well as cash receipts in a lump sum.  Verify that the deposit slip total and mailroom remittance sheet total are the same.  If not, recount the cash and checks.  File the copy of the deposit slip by date.
4. Split all remittance advices from the checks, and copy all checks that have invoice numbers written on them.  Verify that this packet of information matches the total to be sent to the bank in the deposit.
5. Send the completed deposit to the bank by courier.
6. Upon the return of the courier with the bank-validated deposit slip, staple it to the copy of the deposit slip that was retained earlier and file it by date.

Update the Cash Receipts Journal (Cashier)

1. Open the cash receipts screen in the accounting software and set the receipt date to today's date.
2. For each customer payment, enter the customer number, individual check amount, and the check number and date, and then move to the detail section of the screen.  The list of all open invoices for the customer will appear.  Click on each invoice being paid and enter any discounts taken.  After identifying all invoices paid by each customer, enter the transaction.  Continue in this fashion until all receipts have been entered.
3. Print the cash receipts journal for the entry date and match the total received to the total on the deposit slip copy.  Investigate any variances.
4. Send the remittance advice packet to the accounts receivable staff.

Reconcile Cash Receipts Information (Receivables Clerk)

1. Match the mailroom remittance advice sheet to the cash receipts journal and remittance advices.  Investigate any variances.
2. Staple the cash receipts journal to the remittance advices and mailroom remittance sheet.
3. If the reconciliation is complete and all variances have been investigated, stamp the packet as approved and initial inside the stamp.
4. File the receipts packet in the applied cash filing cabinet.

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