002-003 - Cash And Cheques Payment Cycle

This paper explains how the cash payments cycle works from the point of view of a small/medium enterprise. The paper includes:

• a Cash Payments Cycle Flow Chart
• discussion and samples of Orders
• a discussion on the receipt of goods
• a review on the use of an Internal Authorisation Stamp
• a discussion on the return of goods and the issue of an Adjustment Note;
• together with the payment of Tax Invoices (where no Statement is issued) and the payment of Tax Invoices (Statements are issued).

The paper also considers:

• authorisation of payment
• remittance advice and cheque
• writing up the cash payments book
• sundry columns in cash payment book
• payment of personal expenses
• bank charges; and
• totalling cash payments book

A number of examples are contained in the paper, including:

• cross referencing between cash/cheque payment book and the paid accounts file
• cash payments book - headings of columns
• writing up cash payments book
• cash payments book - treatment of capital expenditure
• cash payments book - totalling of dissection of columns and cross-adding to reconcile with bank column

The input tax credit column has been included in all cashbooks.