How to Reconcile Cash Sales With Deposits
Daily cash sales receipts reconciliation ensures cash collected each day balances with cash receipts recorded on register tapes and accounts receivable collections. The process is not only vital to ensuring cash funds are properly deposited and recorded but also to ensure internal control policies are being followed. A standard operating procedure that follows cash handling internal controls is one of the most effective ways a small-business owner can safeguard daily cash flows.
Reconcile cash collected to cash reported on register receipts before filling out a standard bank deposit form. Use a daily cash count sheet divided into one section for entering cash collected and another section for entering totals from the register tape. Start by counting and entering cash collected according to denomination. Add the amounts and enter total cash collected. Next, calculate and enter individual totals for checks, credit card receipts and the value of any coupons collected throughout the day. Calculate and enter a grand total for collected cash receipts. Next, enter gross cash, check, credit card and coupon sales as well as voided sales and sales returns using information from the register tape report. Calculate and enter a grand total for register report receipts. Compare the two grand totals to ensure they agree.
Investigate the cause and reconcile variances in daily cash receipts immediately. Check to see whether the variance is the result of incorrectly keying in a cash purchase. If this is the case, the variance exists only on paper and can be easily reconciled by noting the cause on the cash reconciliation sheet and making an adjusting entry. A cash shortage or overage is most often the result of failing to handle cash correctly. Recount cash receipts and if the variance can’t be found, note the amount on the cash reconciliation sheet and in the cash short and over general ledger account.
Record accounts receivable checks and cash as soon as they’re received on a check receipts list. Upon receipt, stamp the back of each check with a “for deposit only” stamp. When entering check receipts, record the payer’s name, the check number and the amount paid. If a customer pays in cash, record the customer’s name, indicate the payment was made in cash and record the amount paid. At day’s end, calculate and enter a daily grand total at the bottom of the form.
Reconciliation forms, cash receipts and accounts receivable collections should be forwarded at day’s end to the person responsible for assembling the daily deposit. A full or random recount can then be undertaken depending on the business’s standard operating procedure. Once verification of cash amounts is complete, cash and checks are recorded on the deposit slip. A final check to compare cash and check totals to those on the reconciliation forms marks the final step in the daily reconciliation process.