Start the day by collecting all cash from the safe, all checks received from the store and received in the mail.
All cash or checks received from the store can be logged on a daily log and signed for both from the store and upon receipt in accounting.
Prepare all monies to go to the bank, depending on the organization checks may be scanned utilizing scanner provided by the bank.
Depending on the organization all cash should be placed in a locked for delivery to the bank.
Code each check or cash and record into the Data management system.
If sending checks to the bank, make copies of all checks, endorse checks, record on the deposit slip and prepare for deposit.
If depositing utilizing the bank’s scanners, make copies of all checks and follow the bank’s guidelines for depositing and destruction of checks after the waiting period.
Closing out the daily deposit
Depending on the Data management system, create a holding account for daily deposits, as each check is recorded credit to the receivable account, debit the temporary holding account.
Once each deposit is complete, reconcile the total deposit against the amount in the holding account.
If there are any discrepancies, correct and close the deposit by crediting the holding account, debiting cash in bank.
Confirm the clearing or holding account is zero.
For accounting records, create a daily batch of all check copies deposited, cash log and a copy of the deposit slip, upon receipt of the bank receipt batch that day’s deposit together and scan into a folder if this is an option. If not an opportunity create a monthly folder of all deposits prepared and submitted to the bank.
Provide copies of invoices to vendor accounts as needed.
Call on past due accounts as needed.
New A/R account Set-up
For new account set up,
1. Obtain a sign credit application from the potential charge customer.
2. Verify the customer’s information such as address, phone number, principal owners, bank account information, and payment history from other vendors.
3. If approved, get final approval from management and proceed to step number 5.
4. If declined, receive support from management and send by regular mail (upon documentation for your files) the basis for not granting credit, such as insufficient credit history or length of time in business. Regardless of the reason explain to the customer and place the customer’s information in a secure place.
5. Upon receipt of final approval from management, create an electronic folder or hard copy, assign a credit limit and charge account number, update the information in the Data management system, confirm receipt of a sales certificate for the new customer.
6. Provide the Parts and Service Department the new charge account information including account number and credit limit.
Recording payments to customer receivable accounts through the DMSystem is another function within the Accounts Receivable process.
Coding upon receipt of payment (check, credit card cash, money order, travelers check) – coding is similar to creating a key to the map. Regardless of the type of payment presented, check, cashier’s check or money order when coded with the account number and accounts receivable account number where the funds should be posted in the DMS the first time it makes life simple in the accounting world.
Using the Data Management System function for cash receipts
The Data Management System function for recording cash receipts is strictly that to post cash, check, and money order, cashier checks, as examples to the correct or assigned general ledger account. To maintain the integrity of each receivable account, record all cash receipts utilizing the cash receipt journal or cash receipt function. A general journal posting or different journal posting besides the assigned cash receipt journal creates a breach within the accounts receivable process. It creates an area of exposure that may allow mishandling of cash within the organization. To foster a healthy and accountable accounting environment, record all monies received in the dealership through the cash receipt function if it’s an option.
Capping – discussion limited to CDK end-users, a function example in CDK is to post receipts to the created invoice instead of to the account balance. The function of capping is an application in which all payments are applied to each invoice. When the AR Clerk runs a detail of the AR customer’s account, it’s easier to identify all outstanding invoices due, misapplied payments or payments that are paid short or long. If the option to post payments to each invoice is not an option, let’s create a plan B to arrange and minimize the reconciliation process. Let’s pretend a payment was received for Company Z for 25000.00 paid on receipt number 2589 although the system may not allow individual postings, create a map for future reference. In the generated receipt an example of the map can be found below, all payments paid by Company Z are specified in the comment area of the receipt, but if the DMS systems allow for a second control or description, insert the receipt number that applies to all invoices relating to receipt # 2589. It helps the AR Clerk or anyone else to quickly identify all invoices paid with limited effort.
Invoice# amount Vendor# 2nd Ctrl
118924 15000 300 2589
118931 25.66 300 2589
118925 74.34 300 2589
118918 9000 300 2589
118905 900 300 2589
Total Paid 25000
Once all deposits are completed for the day,
- Run a summary detail of the (2) clearing account, account number 2100 confirming its zero and attach to the daily reports. The delivery of the deposit to the bank could happen in various forms, from a courier delivering the deposit and waiting for a receipt, to an armored truck picking up the deposit. The dealership may also utilize bank scanning equipment for remote capture, combined with secure delivery of cash to the bank. Regardless of the process, refer to the organization’s guidelines for safe delivery of all funds to the bank.
Clearing packet and where to store it –
- Upon receipt of the bank receipt confirming the deposit against the deposits submitted to the bank regardless of whether it’s electronically sent to the bank or a walk-up teller. What is critical is to confirm that the dealership received the proper credit for funds deposited.
- The last step in the cash receipt process, combine the bank receipt, clearing detail showing the holding or clearing account is zero, a copy of the cash receipt register, copies of all checks or money orders and a copy of the deposit slip. Secure all documents in a safe place, if scanning is an option, please scan and then refer to the organization’s guideline for storing deposit documents.
Recording payments to the car vehicle receivables can happen from one or more of the following monetary instruments received for payment such as cash, check, money order, wires, electronic payments, and ACH as examples. Recording of payments to the Data management system happens in the cash receipt journal/function similar to accounts receivable and other accounts. All payments received for posting into the Data Management System also require a key (account, amount, customer receivables control). Regardless of the Data Management System, the account number, amount, control and description may be needed. For example, Jane Clark makes a down payment of $2500.00 for the purchase of her 2014 Mercedes ML250. The account number coding placed on the top of the instrument should be coded and record as shown below in the Data management system.
Account# amount Control Description
111100 2500 JK123456 down-pymt-on-Mercedes