CASH MANAGEMENT Forecasting Future Cash Receipts and Payments.
Cash Receipts Cycle
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Transcript of Cash Receipts Cycle
7/21/2019 Cash Receipts Cycle
http://slidepdf.com/reader/full/cash-receipts-cycle-56da4a9e53e69 1/19
CASH RECEIPT CYCLE
7/21/2019 Cash Receipts Cycle
http://slidepdf.com/reader/full/cash-receipts-cycle-56da4a9e53e69 2/19
CUSTOMER
CHECK
REMITTANCE
ADVICE
RECONCILE
CHECKS WITH
THE RA AND
PREPARE
REMITTANCE
LIST
REMITTANCE
LIST
REMITTANCE LIST
REMITTANCE
LIST
CHECK
REMITTANCE
ADVICE
CHECK
REMITTANCE
LIST REMITTANCE LIST
REMITTANCE
ADVICE
MAIL ROOM CASH RECEIPT ACCOUNTS RECEIVABLE
7/21/2019 Cash Receipts Cycle
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REMITTANCE
LIST
CONTROLLER
7/21/2019 Cash Receipts Cycle
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CUSTOMER
CHECK
REMITTANCE
ADVICE
RECONCILE
CHECKS WITH
THE RA AND
PREPARE
REMITTANCE
LIST
REMITTANCE
LIST
REMITTANCE LIST
REMITTANCE
LIST
CHECK
REMITTANCE
ADVICE
JOURNAL
VOUCHER
BANK
CHECK
REMITTANCE
LIST
PROCESS
CASH
RECEIPT
DEPOSIT SLIP
DEPOSIT SLIP
DEPOSIT SLIP
CHECK
REMITTANCELIST
FILE
CASH
RECEIPT
JOURNAL
REMITTANCE LIST
REMITTANCE
ADVICE
MAIL ROOM CASH RECEIPT ACCOUNTS RECEIVABLE
7/21/2019 Cash Receipts Cycle
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JOURNAL VOUCHER
REMITTANCE
LIST
GENERAL LEDGER CONTROLLER
7/21/2019 Cash Receipts Cycle
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CUSTOMER
CHECK
REMITTANCE
ADVICE
RECONCILE
CHECKS WITH
THE RA AND
PREPARE
REMITTANCE
LIST
REMITTANCE
LIST
REMITTANCE LIST
REMITTANCE
LIST
CHECK
REMITTANCE
ADVICE
JOURNAL
VOUCHER
BANK
CHECK
REMITTANCE
LIST
PROCESS
CASH
RECEIPT
DEPOSIT SLIP
DEPOSIT SLIP
DEPOSIT SLIP
CHECK
REMITTANCELIST
FILE
CASH
RECEIPT
JOURNAL
REMITTANCE LIST
UPDATE
AR SUB
LEDGER
REMITTANCE
LIST
REMITTANCE
ADVICE
FILE
ACCOUNT
SUMMARY
AR SUB
LEDGER
REMITTANCE
ADVICE
MAIL ROOM CASH RECEIPT ACCOUNTS RECEIVABLE
7/21/2019 Cash Receipts Cycle
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ACCOUNT SUMMARY
JOURNAL VOUCHER
UPDATE
GENERAL
LEDGER
GENERAL
LEDGER
ACCOUNT SUMMARY
JOURNAL VOUCHER
FILE
REMITTANCE
LIST
ACCOUNT SUMMARY
JOURNAL VOUCHER
BANK
DEPOSIT SLIP
RECONCILE
DEPOSIT SLIP
FROM BANK WITH
BATCH TOTAL
FROM ACCOUNTS
RECEIVABLE AND
CASH RECEIPTS
AND REMITTANCE
LIST
GENERAL LEDGER CONTROLLER
7/21/2019 Cash Receipts Cycle
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Cash Receipts Processes
• Customer checks and remittance advices arereceived in the Mail Room.
▫ A cash prelist is prepared by a mail room clerkand the prelist and the checks are sent to CashReceipts.
▫ The cash prelist is also sent to A/R and theController.
7/21/2019 Cash Receipts Cycle
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Cash Receipts Processes
• Cash Receipts:
▫ verifies the accuracy and completeness of thechecks
▫ updates the cash receipts ournal
▫ prepares a deposit slip
▫ prepares a ournal voucher to send to !/"
7/21/2019 Cash Receipts Cycle
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Cash Receipts Processes
• A/R posts from the remittance advices to theaccounts receivable subsidiary led#er.
▫ A summary of the postin#s is sent to !/"periodically.
7/21/2019 Cash Receipts Cycle
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Cash Receipts Processes
• !/" department:
▫ reconciles the ournal voucher from CashReceipts $ith the summaries from A/R
▫ updates the #eneral led#er control accounts
7/21/2019 Cash Receipts Cycle
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Cash Receipts Processes
• The Controller reconciles the bank accounts.
7/21/2019 Cash Receipts Cycle
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• Authori%ation Control
▫ &roper authori%ation of transactions'documentation( should occur so that only valid transactions #et processed. Authori%ation should take place $hen postin# a
cash payment received to a customer)s account'cash pre*list(.
Internal Controls in the Cash ReceiptsSystem
7/21/2019 Cash Receipts Cycle
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Internal Controls in the Cash ReceiptsSystem
• +e#re#ation of ,uties
▫ Transaction authori%ation should be separate from
transaction processin#.▫ Asset custody should be separate from asset record*
keepin#.
▫ The or#ani%ation should be so structured that the
perpetration of a fraud re-uires collusion bet$eent$o or more individuals. Cash receipts are separate from accountin# records A/R
and cash account.
A/R subsidiary led#er is separate from !/".
7/21/2019 Cash Receipts Cycle
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Internal Controls in the Cash ReceiptsSystem
• +upervision
▫ ften used $hen unable to enact appropriatese#re#ation of duties. +upervision of employees serves as a deterrent to
dishonest acts and is particularly important in themailroom.
7/21/2019 Cash Receipts Cycle
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Internal Controls in the Cash ReceiptsSystem
• Accountin# Records
▫ 0ith a properly maintained audit trail1 it is
possible to track transactions throu#h the systemsand to find $here and $hen errors $ere made:pre*numbered source documents1 special
ournals1 subsidiary led#ers1 #eneral led#er 2 files. Accountin# records that are bein# used in the cash
receipts process are: remittance advices1 checks1remittance list1 cash receipts ournal1 A/R subsidiaryled#er1 A/R control account 2 cash account.
7/21/2019 Cash Receipts Cycle
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Internal Controls in the Cash ReceiptsSystem
• Access Controls
▫ Access to assets and information 'accountin#records( should be limited. &hysical access to cash and access to records such
as the accounts receivable subsidiary led#er andcash ournal should be restricted.
7/21/2019 Cash Receipts Cycle
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Internal Controls in the Cash ReceiptsSystem
• 3ndependent 4erification
▫ &hysical procedures as $ell as record*keepin#should be independently revie$ed at variouspoints in the system to check for accuracy andcompleteness:
!eneral led#er reconciles ournal vouchers fromcash receipts and accounts receivable.
5ank reconciliation
7/21/2019 Cash Receipts Cycle
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