Create the Perfect Money Receipt Example for Personnel with Ease

Money receipt example for Personnel

all right in this lesson we are going to be talking about the cash receipt process so we talked about receiving cash within an organization in the last lesson the very end and so here we're going to expand a little bit and help you understand what that cash receipt process looks like and then we also talked about some focuses of control activities in a previous lesson we're going to show you how those focuses on control activities actually affect the cash process system or cash receipt process and if we do it right we're ensuring that the rest that cash would be stolen is down to a very minimal level so let's take a look at the cash received process what's the goal of the cash received process well at the end of the day the goal for internal controls for cash receipt is that companies receive the appropriate amount of cash they deserve and the cash is safely deposited in their bank account in a hole so if the company is expecting to receive $100 in cash the idea is that the company will receive $100 in cash that cash will make it through a chain of commands and get to the bank account and be deposited at $100 that's the goal at the end of the day and internal controls that we put in place should help us efficiently and effectively do that at the end of the day without it being stolen or reduced in amount so that's what we're trying to do at the end of the day now companies need to set up proper internal controls related to cash to ensure cash is received and deposited as earned so we want to make sure that that's done properly and if it's not then we need to put in additional internal controls or change our internal controls and processing in order to make sure that happens so let's walk you through what a cash received process might actually look like for a company so the first step here in this whole entire activity is that the items are scanned to be sold at the register right so you go to the register and we scan the item so that we know how much we're going to charge you as a customer the second thing that happens is we collect the payment from the customer so we'll exchange those goods for payments and once we've done that and then we'll prepare what we call a cash count sheet so at the end of the day that cashier might take their drawer to the cashiers office and then that cash is totaled up and compared to or prepared to the cash is counted up and then a cash count sheet is prepared to show how much cash was received and collected then from there we're gonna compare the cash in the register with maybe a cash count which sheep and usually the cash contra sheet sheet and now is done electronically and a computer system keeps track of the cash as the PIO system is running so that's how we can compare what's in the till versus with a cash counter she shows then from there we're gonna store the cash in the vault right so we don't want to just hang it out anywhere we want we want to actually in a safe place we want to restrict the access and then we want to complete the bank deposit so will you complete the deposit and then an armored truck come pick it up or we'll take it to the bank and deposit it ourselves then from there we're gonna compare the cash deposit slip with the cash count sheet to make sure that they are the same right so we might give an employee this money to go ahead and deposit but we want to make sure that what we gave them actually is deposited so we'll independently verify that the amount that they deposited is exactly the amount that's on the cash count sheet and then finally here we're going to prepare the journal entries into the books when we put it into the books then we can say that the accounting cycle for the cash receipt process is complete for that cash for that day or for that instance okay now how does this all work and we put controls in place well think about this so this is all these are all the activities these are all the tasks within the cash process activity that we talked about right so notice that we do have some of the control activities that we talked about in another section right here so for instance notice that we've got different people in place so the cashier is going to do the scanning the collecting the payments and then preparing the cash count she the supervisor is going to review the cash and the register and the cash count sheep they're gonna store it in the vault and they're going to prepare the bank deposit and then we also have the economy apartment who's going to do the comparison and prepare the journal entries so we've identified who is responsible for these so that is the assignment of responsibility that we talked about in a few lessons ago and we also have segregation of duties so this entire activity not one person has custody of the entire activity each person or each department here has a different part of this activity they've got responsibilities for different tasks now we don't always have to give the assignment of a task to different people so I don't need to have I've got seven tasks here I don't or eight tasks here I don't need eight different people performing these tasks I can group some of these tasks together and have one person do does it do it as long as the entire activity has multiple people that are responsible for different things now we can also look at each one of these eight here and look at what other focuses in internal controls that we're going to use so scanning the items to be sold that's documenting procedures right we're scanning them so that we can document what we've sold collecting customers payments we're going to restrict access prepared kouchi we're also going to document compare that's independently verify we're going to restrict access because we're going to put the money in the vault we are going to document our procedures and in the face of depositing money into the bank we got a document that somehow so that we know that our number matches what the bank says we're going to deposit comparison independently verified and then documenting the journal entry so as you can see we're using all of the techniques that we learned in internal controls and control activities here when we break down the activity into its different parts and make sure that we've kind of separated things to make sure that fraud can't happen in the cash collection process other sorts of cash receipts so no matter what method a company receives cash whether physically or electronically controls need to be put in place to ensure the proper custody of the cash is maintained so no matter how we do this no matter what other we might collect cash we still have to have this proper custody of cash and in order to do that we'll use internal controls to make that happen so once we have good internal controls in place then we can ensure that the cache that is recollected is the amount that should be collected but also the amount that should be deposited in the bank at the end of the day so that is a look at the cache receipt process and how internal controls plays a good factor in the different parts if we break it down break down the activity into its individual tasks so with that I hope you enjoyed this lesson and we'll see you in the next video hey guys it is Patrick don't forget to press the like button and share this video with someone who could get a lot of use from watching this lesson like maybe a classmate or maybe a friend or maybe just a parent just because you wanted to share this video because you're very excited about what you saw share it with someone and if you want to help us grow and help us make sure that we put the very best in accounting topics out on it YouTube make sure you press the subscribe button and turn on that notification bill that way you're alerted every time we post videos to this channel now I do this with every one of my classes at the end of class what did you learn from this lesson put that in the comment section below and I'll respond to you on what you got out of this video so hope you enjoyed this video and we will see you in the next lesson