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Important notes 2

Prepare and process banking documents

Banking terminology

ATM	Automatic Teller Machine; allows banking day or night, seven days a week.
BSB number	Bank, State, Branch number. Each branch of each bank in Australia has an unique identifying number.
Cheque	Refer to Key Terms and Concepts.
Deposit	Refer to Key Terms and Concepts.
Dishonour	When the bank refuses to pay a cheque and returns it to the bank at which it was deposited. The bank then returns it to the customer who deposited it.
Dishonoured cheque	A cheque that will not be paid (honoured) by the bank, probably for one of the following reasons Drawer’s account has insufficient funds Drawer has closed the account or died since writing the cheque Cheque is stale Drawer has stopped payment Cheque shows an error eg the amount in words and figures do not agree, endorsement is incorrect, alterations have not been initialled Cheque is damaged When a cheque is dishonoured both the drawer and the payee will usually be charged a fee by the bank.
Drawer	The account holder or the person who writes and signs the cheque on behalf of a business account.
Drawee	The bank on which the cheque is drawn – the drawer’s bank – which will pay the money to the payee from the drawer’s account.
EFTPOS	Electronic Funds Transfer at Point of Sale – a customer can pay for goods and services via on-line facilities that link the organisation directly to the bank; the funds are automatically transferred to the organisation’s account without having to physically bank cash.
Endorsement	A signature on the back of a cheque signifying oneself as the payee or transferring ownership to a specified payee.
Merchant Summary	A summary of all sales vouchers and credit vouchers processed using a credit card (eg MasterCard, Visa).
Not Negotiable	A notation made on a cheque. When a cheque is ‘crossed’ or marked ‘not negotiable’ it must be paid into the account of the payee.
Payee	The person or organisation named on a cheque who will receive the amount of money written on the cheque.
Postdated cheque	A cheque dated for a future time. It will not be accepted by the bank until that date is reached.
Sales Voucher	A voucher recording a sale paid for by a credit card (eg MasterCard, Visa). Authorisation from the bank is needed for purchases exceeding the organisation’s store limit.
Stale cheque	A cheque more than 15 months old.
Statement	Issued by the bank to the account customer, it is a regular summary of an account and all transactions which have taken place showing a final balance at the time the statement was prepared.
Reconciliation	Refer to Key Terms and Concepts.

Deposits and withdrawals are accurately entered and balanced according to organisational requirements

All businesses operate a cheque account and rarely pay for goods or services with cash – the exception is when purchasing low cost items (eg magazine for reception, postage stamps) payment for which comes from the Petty Cash fund. Deposits are receipted into the businesses cheque account.

Organisations usually require all incoming monies to be receipted immediately and cash and credit vouchers kept securely. A receipt may be prepared electronically (usually via a cash register or computer program) or manually (using a receipt book).

The following information is located on the examples of receipts below.

Date of the transaction
The receipt number – all receipts are accountable forms and are numbered sequentially
The amount in figures
The amount in words (on a manual receipt)
The amount of discount given (if applicable)
The amount of GST included in the cost
A description of what the payment is for

Preparing accurate bank deposits involves entering and balancing all the different types of payments received. Goods and services can be paid for using

cash (notes and coin)
cheque
credit card (MasterCard, American Express, Bankcard)
EFTPOS

Banking should be prepared on a daily basis.

Cheques and credit card vouchers are checked for validity (signatures, dates, amounts) before processing

Cheques need to be checked before they are banked, to ensure they will not be dishonoured, as follows.

The date is not postdated (dated ahead of today’s date)
The cheque is not stale (dated more than 15 months ago)
The cheque is signed
The payee is correct. If another name appears next to ‘Pay’, there should be an endorsement on the back of the cheque, signing the cheque over to the organisation
The amount in words and the amount in figures agree
Any alterations are initialled by the drawer of the cheque

The same care should be taken when preparing a cheque for withdrawal of funds or payment of an account.

Automatic EFTPOS transactions allows money to be electronically transferred from one account to another for the payment of goods and services. These transactions do not need to be banked and can be checked on the organisation’s bank statement. If for some reason EFTPOS is not working, or in the case of a smaller business, a manual system will be used and a Sales Voucher will be prepared. This voucher is banked (like a cheque) and the funds will be transferred into the business account. Care must be taken to ensure the vouchers are correctly prepared (details, dates, amounts etc) and signatures are checked.

Cash, cheques and credit cards are listed in banking forms in accordance with the banking institution’s guidelines

All banks produce their own deposit forms or slips. These are often encoded (printed) with the customer’s name and account number, as well as the Bank and Branch and BSB (Bank, State, Branch) number. The size of the book is determined by the number of cheques the business is likely to deposit within a reasonable time period. Most business deposit books are designed so that a duplicate (carbon) copy of the deposit is left in the book. Smaller businesses will have a deposit book with a butt (similar to a cheque book) which is the organisation’s record of the deposit.

While each bank’s slip looks slightly different, each requires the following information.

Name of the bank, the branch and the BSB number
Name of the depositor/account holder and the account number
Date of deposit
Total of coin/notes/cash
Total of credit card transactions / Merchant summary
A listing of the cheques showing drawer, bank and branch of each cheque
Total of cheques
Total value of the deposit (cash, credit and cheque transactions)
Signature of the person depositing/preparing the deposit
Space for the teller’s signature, the number of cheques and other information for bank use only

Preparing the deposit
The following steps are needed to prepare a deposit. Step 1: Count notes and coins and itemise on bank deposit Cash is sorted and counted. Notes and coins should be separated into denominations before counting. Ten notes of any denomination can be collated into bundles, facing the same way and grouped with an elastic band. In sufficient quantities coins can be put into plastic banking sachets or bags eg $50 worth of $2 coins. Keep the cash secure at all times. Use a Cash Summary Slip (or similar) to help count the cash. The amount on the bank deposit form is itemised in the appropriate section. Some banks require coin and notes to be entered separately, others tally both together. The example at right shows how the cash has been entered.

Preparing the deposit

The following steps are needed to prepare a deposit.

Step 1: Count notes and coins and itemise on bank deposit

Cash is sorted and counted. Notes and coins should be separated into denominations before counting. Ten notes of any denomination can be collated into bundles, facing the same way and grouped with an elastic band. In sufficient quantities coins can be put into plastic banking sachets or bags eg $50 worth of $2 coins. Keep the cash secure at all times. Use a Cash Summary Slip (or similar) to help count the cash.

The amount on the bank deposit form is itemised in the appropriate section. Some banks require coin and notes to be entered separately, others tally both together.

The example at right shows how the cash has been entered.

Step 2: Prepare Merchant Summary and enter on bank deposit

A Merchant Summary is prepared, making sure that Sales and Credit Vouchers have been included. The total will tally Sales Vouchers less Credit vouchers. The total is entered in the appropriate space on the bank deposit.

Sales and Credit Vouchers come in triplicate – one copy for the customer, one for the business and one for the bank. The summary and the bank copy of all vouchers are placed in a special envelope and included in the day’s banking.

The following information is included on the Merchant Summary.

The name of the business banking the Merchant Summary
The signature of the person preparing the deposit
The date
The listing of the individual Sales Voucher amounts
The total number of Sales Vouchers
The total value of Sales Vouchers
Notice the space for Credit Vouchers. These REDUCE the value of the Merchant Summary because they represent money going out of the business – back to the customer who has returned goods.

Example of two sales vouchers

Example sales voucher

Example of a credit voucher

Example credit voucher

Example of a merchant summary

Example merchant summary

Step 3: Itemise cheques and total on the deposit form

The bank requires the name of the drawer of the cheque, the bank and branch (alternatively the BSB number) and the amount of the cheque. The name of the business should NOT be put in the drawer column.

The cheque details are written in the appropriate columns as in this example below.

Cheque 1

Cheque 2

Cheque 3

Drawer	Bank	Branch	Amount
Surf and Sun Hotel	Australasian	Brisbane QLD	493-25
PreLoved Wares	MacQuery	Beverly Hills NSW	1800-00
Steven De La Monde	SouthEastern	Beverly Hills NSW	56-00

Step 4: Total all the components of the deposit and check for accuracy

The following sample bank deposit form and identifies each piece of information. The details are from the examples used above. Once all the component amounts have been entered, the total deposit is tallied up and all the other details required are completed eg date, account name, signature of depositor.

Deposit Slip for above cheques

When preparing the deposit it is good practice to bundle cash, cheques, credit card vouchers and merchant summary vouchers according to bank guidelines. Credit card Sales Vouchers and Credit Vouchers are listed on a Merchant summary slip and the original vouchers attached, often in a Merchant Summary envelope. It is important to check and understand the bank’s requirements for preparing the deposit and presenting cash, cheques and credit transactions.

Pay-in documentation is reconciled with all money calculations

Before taking the deposit to the bank it should be ensured that all financial documentation is accurate and balances with other records and calculations. The following should be checked.

Total of cash register receipts agrees with the amount to be deposited
Total of credit transactions agrees with the Merchant Summary
Final total of receipts for the day agrees with the total to be banked – it may be necessary to check the Cash Receipts Journal or similar record
Total generated by computer software for the day’s banking agrees with what is to be banked
Cash agrees with what is recorded on the deposit slip

Additional resources

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