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8/14/2019 Chapter 6 - Receiving and Checking Money
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CHAPTER 6
Receiving and checking
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g g
Contents
Control over receipts Remittance advices Receipts given to customers
Ways in which customers pay Cash: physical security considerations Cheques Receipt of cheque payments
Receipt of card payments EFTPOS Other receipts
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Control over receipts
Ensure a good cash flowBanking (performed promptly and correctly)
Security (avoiding loss or theft)
Documentation (remittance advice)
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Evidence of payment other
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Receipt from customers
Main typesCash
Cheque
Credit or debit card
Other typesStanding order
Direct debit
Mail transfer andtelegraphictransfer
Automated credit
services
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Cash: physical security
Forgery
Theft
Careful
examinationCash register
security, Safes
Protective glass('bandit screen')
Frequent banking
Problem How to deal
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Cheques
A cheque is 'anunconditional order in
writing addressed bya person to a bank,signed by the persongiving it, requiring thebank to pay ondemand a sumcertain in money to orto the order of a
Dishonored
Cheque guaranteecards
Definition New related words
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Cheques: physical security
Customers are asked to keep chequebooks and cards separate
The number of cheques in a book is
kept to a minimum.
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Plastic card
Most retailoutlets whichaccept PLASTICcards now usean electronic
system knownin the UK asEFTPOS(ElectronicFunds Transfer
at Point ofSale).
CREDIT vs.DEBIT cards
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EFTPOS
Electronic Funds Transfer at Point of Sale:makes possible the automatic transferof funds from a customer's bank
account to a retail organization at thepoint in time when the customerpurchases goods (or services) from it.
The EFTPOS terminal
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Other receipts
Method of
payment availablefrom banks for afee
When a customer
needs a guaranteethat the paymentcannot be
Regular payments
Standing order canonly be changedby the payer
Direct debit can be
changed by thereceiver at will
Bankers draftStanding orders and directdebits
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Discussion
Business: electricity company 'I am a domestic customer, and receive a bill from you
each quarter. I want to continue to pay quarterly, but Idon't want to go the trouble of writing out a cheque ormaking a special trip (for example to a bank or your
office) to pay the bill. However, I do need to know howmuch the bill is going to be before I am due to pay it.What method of payment would you suggest?
'You can pay by quarterly direct debit. You need tocomplete a direct debit mandate form whichauthorises us to debit amounts from your bank
account. We will send you a bill in the usual way eachquarter, and the amount due will be debited from youraccount 14 days after the date of the bill, so you'llknow how much is to be debited well in advance. If anerror is made, either the bank or ourselves must put it
'
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Quiz
What is the function of a remittance advice?Shows which invoices a payment covers
Should cash be sent through the post in 'an
emergency'?No. Never!
Is it safe to send a cheque through the post?Yes. A cheque can be 'stopped' if it goes astray,
and 'traced' if deposited by an unauthorisedperson.
A banker's draft cannot be dishonoured. True