- Source documents may vary in colour shape or size, etc. The examples shown are for a fictitious entity in South Africa to illustrate some basic principles. Other countries have very similar documents. Please check with your accountant or taxation authorities for professional advice.

All cash receipts that are deposited or received into the bank account, which will increase the bank balance, are entered into the cash Receipts Journal. Should the bank account be in an overdraft, where money is owed to the bank, deposits may decrease the overdrawn bank balance.

Cash transactions may be defined as all monies that is received in bank notes and coins, cheques, credit cards, money orders, bank transfers, etc. The basic source documents are a receipt or deposit slip. You may find that there may be no deposit slips for money paid directly into the bank account by customers or third parties, or for bank transfers.

When receiving money, the first thing to do is to issue a receipt and hand it to the customer or party from which the money is received. If a cash register is used, the till slip is the receipt for the customer. At the end of the day the float and the total sales should be reconciled. All the cash must then be regularly deposited into the bank account.

There are several considerations that have to be taken into account to decide when moneys received can be deposited. The ideal is to deposit on a daily basis. Some of the issues are the following:

• Cash flow – if there is sufficient money in the bank account at the bank to honour the payments and debit orders.
• Cheque receipts from certain customers may be returned as dishonoured, since they may have no money in their bank account when you decide to bank money or for some other reasons.
• Safety precautions in place.
• Any other considerations to meet your requirements.

Deposit slips may be obtained at the bank counter. The bank may issue a pre-printed deposit slip with the business details, account number and deposit number on it. Deposit slips are normally filled in duplicate or triplicate and handed to the cashier. The bank teller will count the cash and cheques, etc., enter the bank stamp and tear out the original and hand one copy back. In the case of a deposit book, the book with the book copy will be handed back.

The basic information that must be entered on a receipt is:

• Date of the receipt
• Received from whom
• Amount in words and in figures
• For what the money is received
• Additional information that may be required, is the payment method, whether by cash or cheque, etc. and the amount for discount allowed, if any.

An example of a receipt is as shown:

The basic information that must be entered on a deposit is:

• Date of the deposit
• The business name and bank account number (if not already pre-printed).
• The total amount in figures for the cash, money orders, etc.
• The name of the drawer, bank and branch as well as the amount. (Each cheque should be individually listed).
• The total amount of the deposit, including the cash, postal orders and cheques.

An example of a deposit slip is as shown:

If you have more than one receipt, you need to enter the total cash of the receipts (for cash received) and list the details of any cheques received.

The following is an example of cash, and a cheque, received and deposited on the same deposit slip.

- The details of the cheques listed in the Deposit slip will help you to identify and re-collect the moneys, if a cheque is dishonoured or returned by the bank as unpaid.

- It is important that no cash received is used to make payments. If the internal control over the cash received is unsatisfactory, it could be a nightmare to reconcile and find any cash that has disappeared. The petty cash can rather be used to make cash payments.

- It is a good idea to note the range of the receipt numbers issued and the total amount of the cash as well as the total amount of cheques deposited at the back of the deposit slip. This may be helpful for internal control to establish whether all cash and cheques are deposited regularly.

A cheque book is a very important and special care should always be exercised as to who has access to the cheque book, who may write out cheques and who may sign cheques.

- If a cheque book ends up in the wrong hands, a business may suffer losses, such as fraud with cheques, which is a common crime.

- Before any cheque can be issued, you must be sure that there are sufficient funds in the bank account. If you do not have any money in your bank account, the bank should approve an overdraft facility, before the cheque can be issued. If you do not have sufficient funds or facilities in your bank account, the cheque may be returned unpaid.

Specimen of a written cheque counterfoil or stub, and a cheque:

An important issue is to write clearly and readable on the cheque with ink that is not erasable, and not to leave any room for possible fraudulent additions or alterations. Any blank spaces should be ruled through.

To Write a Cheque:

• Date - Fill in the date on both the cheque and the counterfoil.
• To - Fill in the name of the beneficiary (supplier or creditor) on both the cheque and the counterfoil. It should be the same as the Pay line on the cheque.
• For - Fill in the reason for the payment (i.e. payment of account, petrol, etc.) This will help you to allocate the payment to the correct account. This is not applicable to the cheque itself.
• Amount - Fill in the amount. The amount in words must also be entered.
• Crossing - Enter the words NOT TRANSFERABLE between 2 parallel lines, if is not a cash cheque.
• Signature - Sign the cheque and attach the cheque to any supporting documents, if any, before posting the cheque or handing the cheque to the beneficiary.

When the cheques are cleared by the bank (cashed), the cheques are usually returned together with the bank statement. These cheques should be checked with your bank statement when doing the bank reconciliation. These cashed cheques should be retained as proof of payment (for example, where a beneficiary alleges that payment has not been received).

- These cashed cheques may also be needed as evidence for fraud with cheques (if somebody has been tampering with your cheques).

Any payment made, must be supported by a source document. If you purchase any goods or services for cash, you should receive a till slip or other source document.

If the purchases or payment was made out of the petty cash float, these source documents will be captured and posted to the ledger in the Petty Cash Payments Journal.

In some businesses where a person is entrusted with petty cash, a petty cash voucher is normally written out and authorised to remove or take any money out of the petty cash float. This is important in the case where some other person is handed the money to do the purchase on behalf of the petty cashier.

An example of petty cash vouchers is as follows:

When a person returns with the purchases from petty cash, a till slip will be handed to the petty cashier and needs to be attached to support the petty cash voucher. The petty cash voucher is entered in the Petty Cash Payments Journal.

The petty cash voucher is basically a requisition form to keep track of any moneys taken from the petty cash and is later supported by a supporting voucher. For example, if a purchase for 57 is to be made, you may hand 60 to a person, if you do not have sufficient change in the petty cash, to the person sent to purchase and collect the goods. When the person returns, he / she must submit a slip or supporting source document to the value of 57 and 3 change to the petty cashier.

- When designing a petty cash voucher, you need to look at your own requirements to note any additional information, such as the amount handed to a person, the signature, etc.

- Depending on the frequency and amounts involved and the provisions in Tax legislation (Income Tax and VAT/GST/Sales Tax (if you are registered for VAT/GST/Sales Tax) or any other legislation), a petty cash voucher my not be sufficient to support expenses and Input VAT/GST/Sales Tax claimed.