Preparing Matching and Processing Receipts

1. Receive, identify and record receipts

What is Receipt?

It is;

A written acknowledgment of having received, or taken into one's possession, a specified amount
of money, goods and etc.

 Receipts, the amount or quantity received.

 The act of receiving or the state of being received.
 Something that is received.

A receipt is a written acknowledgment that a specified article or payment has been received. A
receipt records the sale of goods or provision of a service. If the recipient of the payment is
required to collect a tax from the customer, the amount collected would also be included on the
receipt and the amount would be deemed to have been collected on behalf of the relevant
government tax authority.

In many countries a retailer is required to include the tax and similar amounts in the price of
goods sold. Similarly, amounts may be deducted from amounts payable, as in the case of wage
withholding taxes.

On the other hand, tips or other gratuities given by a customer, for example in a restaurant,
would not form part of the payment amount. In some countries, it is obligatory for a business to
provide a receipt to a customer confirming the details of a transaction. In most cases the recipient
of money provides the receipt, but in some cases the receipt is generated by the payer, as in the
case of goods returned to a store for a refund. A receipt is not the same as an invoice.

However, there is usually no set form for a receipt, such as a requirement that it be machine
generated.

Many point-of-sale terminals or cash registers automatically produce receipts.

Receipts may also be generated by accounting systems, be manually produced or
generated electronically, for example if there is not a face-to-face transaction.
To reduce the cost of postage and processing, many businesses do not mail receipts to
customers, unless specifically requested or required by law; some transmitting them
electronically.
Others, to reduce time and paper, may endorse an invoice, account or statement as "Paid".

Store receipts

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 The custom in most stores at the point of sale is for a salesperson to scan or in some way
record the price of a customer's proposed purchases, including tax, discounts and other
adjustments.
The salesperson would indicate to the customer the total amount payable, and the customer
would indicate the proposed method of payment of the amount.
After processing the payment, the salesperson would then generate in the one document an
invoice and receipt. If payment was made by a payment card, a payment record would also
be generated.
These are the printed record of the transaction, and are legal documents. A copy of these
documents would be handed to the customer.
In many countries a retailer is under a legal obligation to provide a receipt to a customer
which shows the details of a transaction and the store and other information, so that the tax
authority can check that sales are not being hidden.
The document may also include messages from the retailer, warranty or return details, special
offers, advertisements or coupons, but these are merely promotional and not part of the
formal receipt.
Receipts may also be provided for non-retail operations such as banking transactions.

Manual receipts

 Hand-written or hand-completed receipts are more often used for infrequent or irregular
transactions, or for transactions conducted in the absence of a terminal, cash register or
point of sale.
 For example, as provided by a landlord to a tenant to record the receipt of rent.

Types of Receipt

Money is received in three ways:

a) Directly by cheques or bank transfer.

b) At the mill on open days
c) Off‐site at talks, etc.
A. Direct Receipts
 Cheques received directly for memberships and postal sales are recorded by her in an Excel
file. Membership information is recorded in an Access database.
 Bank transfers are recorded from on line banking and held in an Excel file. Copies the details
on a monthly basis for membership records and to confirm receipts for wholesales.
B. Receipts at the Mill

All receipts are rung into the till and identified as by cash or cheques. At the end of each day’s
trading the contents of the pot are counted and rung into the till as a single donation transaction.

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C. Receipts Off‐site
 A manual record is made of cash and cheques received other than in the above two.
 This record identifies receipts by item so that they can be rung into the till at the next
opportunity.

The actual total of cash/cheques is checked against both the manual record and the till total.
The cash/cheques and the manual record are left either in the till or in the safe in the mill.

Recording and Depositing Cash Receipts

When to Deposit

 All cash receipts should be recorded and deposited if it idle that mean out purpose.
 If the correct account cannot be easily identified for a cash receipt, a suspense account should
be used to ensure that the receipt is recorded in a timely manner and posted to the
organization accounting records. Such receipts will be reclassified when the correct account
is determined.

Use of RIF (Receipt Identification Form)

Use the on-line Receipt Identification Form (RIF); to record receipt of any of the following
forms of payment:

o currency and coin o money orders

o checks o traveler’s checks
o drafts
Certain items may be accompanied by supporting documentation that becomes part of the
deposit record, such as correspondence from donors or other descriptive correspondence or
attachments.

Do not use RIF to record:

returns of Payroll overpayments: salary/wage or benefits

Repayments of charges that were initially incurred through Accounts Payable (e.g.,
vendor refunds, repayments of travel or expense advances)
Receipt of grant or contract funds.

Prepare and Deliver the Deposit

Separate cash and checks from supporting documents.

Submit coins in envelopes or rolls.
If you are submitting a large amount of cash, separate and strap the bills.
Roll coin if it exceeds the standard amount of a roll of coin.
Cash straps and coin wrappers are available at Treasury Services.

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 Reconcile the cash to the corresponding tracking slip amount, and attach cash and checks
securely to the tracking slip.

Invoiced Sales

Some wholesales to shops are invoiced. Receipts are treated as “direct” or “off‐site”
depending on method of payment.
Invoices are sequentially numbered and maintains a list identifying invoice no., date,
customer, value, payment method and (where applicable) date rung into till.
The list is copied monthly to income reporting.

Financial Controls Policies and Procedures for Small Nonprofit Organizations

1. Receipt of Checks in the Office. The Secretary opens all mail addressed to the organization.
 The Secretary makes a photocopy of all checks received and provides the photocopies to the
Treasurer.
 This allows the Treasurer to verify that all checks received are deposited.
2. Receipt of Cash in the Office. Cash is easily stolen and must be handled carefully. If cash
comes into the office, the person accepting the cash must provide a written receipt when
taking the cash:
 The receipt should state the person’s name, the date, the amount of the cash and the
purpose of the payment.
3. Deposit Slips. The Secretary will deposit corporate funds as follows:
 Prepare a deposit slip in duplicate.
 Photocopy the checks and staple the photocopies to the copy of the deposit ticket that we
keep.
 File this documentation chronologically in a locked cabinet to prevent theft.
4. Bank Deposit. If no cash is present, the deposit may be mailed to the bank. If cash is
present, a second person (if available) shall verify deposited funds prior to the Secretary
sealing the envelope and making the deposit in person. The person verifying the cash shall
initial the cash on the copy of the deposit slip retained by the organization.
5. Receipt of Checks and Cash outside the Office. If checks and/or cash come in outside the
office (such as at a fundraising event), we need to take special precautions to protect these
receipts from theft and to ensure that no one is falsely accused of stealing funds.
6. Credit Card Contributions. We do not accept contributions by credit card. If we decide to
do that, we need to get accounting advice to make sure we have the proper controls in place.

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2. Match receipts to documentation

Understanding the Receiving Process

You can use either an informal or formal receiving process to acquire the goods and services that
you requested on a purchase order.

You must use the formal receiving process if you purchase items to inventory; you can use the
informal or formal receiving process if you purchase items or services to the general ledger.

This section discusses:

i. Informal receiving process.

ii. Formal receiving process.
i. Informal Receiving Process
 An informal receiving process is one in which you enter receipt information at the same
time that you create a voucher.
 For example, if you create a voucher for 50 pens, the system determines that you received
50 pens.
ii. Formal Receiving Process
 A formal receiving process is one in which you enter details of a receipt before you create
vouchers. You create vouchers based on the receipt information.
 For example, if you enter a receipt for 50 pens, you must create a voucher for 50 pens.

To accurately account for the receipt of goods, the formal receiving process is likely to include:

 Taking physical receipt of items.

 Identifying details of the receipt.
 Recording details of the receipt.

Reviewing Journal Entries for Receipt Transactions

This section provides an overview of journal entry review for receipt transactions and
discusses how to:

o Review journal entries for receipt transactions.

o Post receipts.

Understanding Journal Entry Review for Receipt Transactions

The system creates journal entries each time you enter or reverse a receipt. You can review
the journal entries for accuracy and then post them to the general ledger. When you enter a
formal receipt, the system creates journal entries that:

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  Debit an inventory account if it is a stocked line; otherwise debit the general ledger
account.
 Credit a received not voucher account.

If tax is applicable to a receipt, the system also creates tax accrual entries. If you apply
landed costs at the time of receipt, the system creates entries for accrued landed costs.

Posting Receipts

To post receipts, select Receipts Matching and Posting, G/L Receipt Post. After you review
journal entries, you can post them to the general ledger using the General Ledger Post program

Printing Receipt Information

You can print receipt information that is specific to purchase orders, suppliers, business units,
and so forth.

You can print the Open Purchase Order Status report to review purchase orders containing items
that are overdue. For each purchase order that you specify, you can review this detail line
information:

Original order quantity. Quantities open to receive.

Received quantity. Days overdue.
Information for this report prints in this order:

 User ID  Order number

 Supplier  Line number
A total open amount is provided for:

Each purchase order Each user

Each supplier The entire report

3. Enter data to systems

Cash Receipts Procedure

The process of receiving cash is highly regimented. This is because the task of processing checks
is loaded with controls. They are needed to ensure that checks are recorded correctly, deposited
promptly, and not stolen or altered anywhere in the process.

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The procedure for check receipts processing is outlined below:
Record checks and cash.

When the daily mail delivery arrives, record all received checks and cash on the mailroom check
receipts list. For each check received, state on the form the name of the paying party, the check
number, and the amount paid.

If the receipt was in cash, then state the name of the paying party, check the “cash?” box, and the
amount paid.

1. Forward payments.

Insert all checks, cash, and a copy of the mailroom check receipt list into a secure interoffice
mail bag. Have it hand-delivered to the cashier in the accounting department.

2. Apply cash to invoices.

Access the accounting software, call up the unpaid invoices for the relevant customer, and apply
the cash to the invoices indicated on the remittance advice that accompanies each payment from
the customer. If there is no indication of which invoice is to be credited, record the payment
either in a separate suspense account, or as unapplied but within the account of the customer
from whom it came.

3. Record other cash (optional).

Some cash or checks will occasionally arrive that are not related to unpaid accounts receivable.
For example, there may be a prepayment by a customer, or the return of a deposit. In these cases,
record the receipt in the accounting system, along with proper documentation of the reason for
the payment.

4. Deposit cash.

Record all checks and cash on a deposit slip. Compare the total on the deposit slip to the amount
stated on the mailroom check receipts list, and reconcile any differences. Then store the checks
and cash in a locked bag and transport it to the bank.

5. Match to bank receipt.

Upon receipt of the checks and cash, the bank issues a receipt for it. Someone other than the
cashier should compare this receipt to the amount on the deposit slip, and reconcile any
differences.

Chart of Accounts

 The chart of accounts is a listing of all the accounts in the general ledger, each account
accompanied by a reference number.

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 To set up a chart of accounts, one first needs to define the various accounts to be used by the
business.
 Each account should have a number to identify it.

An example of how the digits might be coded is shown in this list:

Account Numbering

o 1000 - 1999: asset accounts

o 2000 - 2999: liability accounts
o 3000 - 3999: equity accounts
o 4000 - 4999: revenue accounts
o 5000 - 5999: cost of goods sold
o 6000 - 6999: expense accounts
o 7000 - 7999: other revenue (for example, interest income)
o 8000 - 8999: other expense (for example, income taxes)

By separating each account by several numbers, many new accounts can be added between any
two while maintaining the logical order.

Defining Accounts

Different types of businesses will have different accounts.

o For example, to report the cost of goods sold a manufacturing business will have accounts for
its various manufacturing costs whereas a retailer will have accounts for the purchase of its
stock merchandise.
o Many industry associations publish recommended charts of accounts for their respective
industries.
o Accounting software packages often come with a selection of predefined account charts for
various types of businesses.
o There is a trade-off between simplicity and the ability to make historical comparisons.
o Some accounts must be included due to tax reporting requirements.
o Other accounts should be set up according to vendor. If the business has more than one
checking account, for example, the chart of accounts might include an account for each of
them.

Account Order

 Balance sheet accounts tend to follow a standard that lists the most liquid assets first.
 Revenue and expense accounts tend to follow the standard of first listing the items most
closely related to the operations of the business.
 For example, sales would be listed before non-operating income.
 In some cases, part or all of the expense accounts simply are listed in alphabetical order.

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Understanding Manual Receipts
Understanding Receipts Entry Methods

Depending on the type of receipt, you can use either the Standard Receipts Entry or Speed
Receipts Entry program to enter receipts. If you enter unapplied or general ledger receipts you
can use either program.

To help determine which method you should use, consider the advantages and limitations of
standard and speed receipts entry:

Understanding the Steps for Processing Manual Receipts

You use the standard three-stage processing steps to manage manual receipts:

 Enter
 Review
 Post

This graphic illustrates the receipt entry process and the tables that the system updates:

Figure 1: below shows Manual receipts process

File documentation
Briefly, here is the 6-step program to effective files documentation:

Step1. Determine what records are most important to your program, who should be responsible
for them, and where they should be located.

Step2. Conduct a records inventory of all the unit's records and match the records to the records
schedules).

Step3. Develop a file plan and filing procedures

Step4. Develop recordkeeping requirements

Step5. Improve files management via technology, indexing, and specialized equipment

Step6. Produce a Records Management Manual.

Step1. Understand the Scope of the Problem

The keys to good filing practices are:

 Filing only what you need to file;

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  Filing it in a way that facilitates access and disposition; and,
 Doing it consistently.

To do this you first must analyze your program's records management needs by determining
what records are most important to your program, who should be responsible for them, and
where they should be located.

Question 1: What does your program do that needs to be documented?

Brainstorm about the types of records created in your program. Examples might include permit
files, project files, reports, publications, time cards, personnel files, contract files, and so on.

Develop a list and group similar types of records, such as multiple correspondence or subject
files, together into series (see the box). The series is the basic unit for organizing and controlling
your files.

Question 2: Which of these records series are important to your program?

Look at each type of record and decide why it is created and maintained. Your program may be
required to create and maintain records for a number of valid reasons

 Including program administration, management reporting, statute, Federal regulation,

Agency policy or procedures
 There are less valid reasons too, such as reference and personal convenience.

Question 3: Who should be responsible for each of the records series?

 This person, usually called the file custodian, may be a secretary or administrative officer,
or a technical specialist, or the unit head.
 Generally there should be only one custodian per series (obviously each staff person is
responsible for his or her own working files).

Question 4: Where should each series be located?

Identify the location, often called the "file station". Take this information and develop a matrix

(see the sample below) that lists all of your records series, the person responsible and the file

station.

Step2. Conducting a Records Inventory

The second step is to match that theoretical structure to reality by going out and conducting an
inventory of what is actually in your office.

To conduct an inventory means to do four things:

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 1) Physically inspect all of the files in the unit and record the essential information about
them.
2) Identify duplicate, fragmented, and related records.
3) Match the records to the records schedules.
4) Evaluate the existing records (documentation) against your documentation strategy and
information needs.
1) Physically inspect the files and record essential information.

This is the most time consuming part of the entire process.

Systematically survey any areas where records might be stored such as offices, storage areas, and
off-site storage areas. Look for records in all media including maps, audio-visual materials, and
electronic records.

To save time, divide what you find into four categories:

 Personal papers
 Reference materials
 Other non-record materials such as stocks of publications
 Records or potential records (including working files)

For the first three groupings, collect only the following information:

 Volume (linear feet or inches)

 Owner (who has custody of the materials) and telephone number and mail code
 Location (room number, file cabinet drawer, etc.)

For record and potential record material, you should collect the following information:

Office: What is the name of the program (office, division, or branch) responsible for the
records?
Location: Where are the documents physically located? For example: file room, someone's
office, etc.
Title: What are they called? For example: permits, correspondence, etc.
Inclusive dates: What is the date span? For example: 1992-1999
Description: What is included in the folder? Final permits, major and minor permits, permit
modifications, general, special, emergency, research, interim permits, pretreatment, and
others.
Arrangement: How are they arranged? For example: alphabetically, by date, etc.
Medium: What is the format?: For example: paper, microfilm, electronic, video, etc.
Volume: What is the current volume in feet or inches? For example: 2"
Annual accumulation: What is the rate of buildup in one year? For example: 6"
File break: When is the file closed or "cut off?" For example: at end of fiscal year

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 Legal requirements:
Vital records: Are these documents needed for disaster recovery purposes or to protect
rights and interests?
Finding aids: Are there any related indexes or lists which serve as finding aids?
Restrictions: Do the documents contain any restricted information such as confidential
business information (CBI), Privacy Act or enforcement sensitive information?
Related records: Are there any other records which are related to this group or series? Are
copies maintained elsewhere, and if so, who holds them?

2) Identify duplicate, fragmented, and related records.

To do this, you must establish intellectual control over them. First, review the surveys forms and
identify records that:

 Duplicate each other or overlap. A complete file should be created and the duplicates
eliminated as to the extent feasible.
 Are fragmented with the result that the complete file is divided among several persons, each
of whom has a portion of the complete file. The fragments should be physically united, if at
all possible.
 Are related to one another, such as drafts and finals, chron and subject files, or final reports
and working papers. By understanding the relationships, you will be able to better determine
the best retention for each piece.

3) Match the records to the records schedules.

The next step is to match the inventory results to the records schedules.

4) Match the existing documentation against your documentation strategy and evaluate
whether it matches your information needs.
o The final step in the process is to determine whether the records you have are the ones
you need.
o Compare the records you have identified to your documentation strategy.
 Do you keep files you don't need?
 Are you missing files you do need?
 Does the current organization and retention meet your current needs?
 If not, what should be changed so your needs are met?

Step 3; Developing the Filing System - The File Structure and File Plan

A real file plan is only one component of a filing system, which is a set of policies and
procedures for organizing and identifying files or documents to speed their retrieval, use, and
disposition.

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 The first document in the filing system was the Matrix for Office Files you developed as part
of Step 1.
The second document is the records schedule that describes the record series and gives the
retention and disposition.
The third document is the file plan.

Why are the File Plans Important?

Day-to-day, it is your key to better files. It will help you avoid the "subject file trap" by enabling
you to:

 Document your program's activities effectively.

 Identify records consistently.
 Retrieve records quickly.
 Link to the records schedules.
 Retire records to the Federal Records Center easily.

The Subject File Trap

The typical subject file has the following characteristics, ALL BAD:

It contains records, non-records and personal papers.

It contains records that belong in multiple series.
There are no rules or procedures for filing documents.
It is never "cut off" so that active and inactive records are filed together.

Identifying and Arranging Series

Arrangement

There is no one arrangement scheme that is best for all records. Here are some basic suggestions
on the major ones.

 Chronological
 Arranged by date.
 Numeric
 Arranged by number.
 Alphabetical
 Arranged in alphabetical order from A-Z.
 Alpha-numeric
 Arranged according to an identifier made up of letters and numbers.

Agency File Codes

The approach we suggest is to use the Agency File Codes as the basic tag to identify each series.

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A Sample of Commonly Used Agency File Codes:

 401 110 - Office Administrative Files

 405 036 - Routine Procurement Files
 401 187 - Intra-Agency and Internal Committees
 405 202 - Contract Management Records
 401 127 - General Correspondence Files

Arranging the Records within the Series

The second stage of the file plan is to determine how to arrange the folders or documents within
the series. There are four basic ways to arrange records within a series:

 By date (chronological)
 By some assigned number (numeric)
 In alphabetical order by folder title (alphabetic)
 According to a code made up of letters and numbers (alpha-numeric)

Step4. Developing Record keeping Requirements

At one time, records management was thought of as simply a way to cut down on the amount of
paper in the office.

 Adequate and Proper Documentation

Three Components of Recordkeeping Requirements

The three basic components (layers) of a comprehensive recordkeeping requirements package

are:

 Agency requirements
 Program requirements
 Series requirements

Step5. Applying Technology to Records Management

People frequently turn to technology because they find they can't manage their paper records.

Step6. Produce a Records Management Manual.

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