Explore the Best Money Receipt Example for Management

Money receipt example for Management

let's look at an example where we prepare budgeted cash receipts so what we have to do is look at our sales and determine what percentage will be received in cash and what percent will be collected on credit and for this particular company 40% of hockey den sales are for cash and the remaining 60% of sales are on account none of the sales on account are going to be collected in the month of sale but all sales on a counter will be collected in the following month so this is a pretty simplified version so if our sales levels are as shown and then we expect to receive the subsequent months credit sales in the current month or the previous month credit sales in the current month we can go ahead and plug those in so September sales revenue is going to be included because 60% of September sales will be collected in October so the accounts receivable then will be 60% of the budgeted sales amount and then we will collect that in the following month so 60,000 should be collected in November 48,000 should be collected in December now the difference here between the budgeted sales and the cash credit sales will be our cash sales and that's why we have those plugged in which is 40 percent of the sales 40 percent of 80 thousand is 32,000 and then we can see here yes how the collection of receivables carries down and so our total cash receipts will be the cash sales plus the collection of the previous month's credit sales to give us our total cash receipts for each and every month