Cash Controls
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Cash on delivery sales (COD’s)
The COD sales area is a high risk integral part of our business. The COD account must only be used for pure COD business – it is stating the obvious but if a customer has an arrangement to settle their account via a means other than cash against delivery then they must not be treated as a COD customer. This means that any customer that may settle at the end of the week or every Monday i.e. any 7 day or similarly named accounts, may not be accounted for as COD business. These are account customers and as such must be accounted for as such – they must be set up in your debtor’s ledger as a separate stand alone account with the appropriate credit terms i.e. 7 days, 10 days etc.
This cycle has a number of unique characteristics and in order to mitigate the risks of misappropriations of funds; personnel must adhere to the following procedures:
The major activities of COD sales can be broken down as follows:
Invoicing and despatch
Receiving, recording sales and payment
COD reconciliations
COD and cash refunds
COD supervisory controls
Invoicing and dispatch
No stock items must leave the store without being invoiced out and checked by security or designated dispatch personnel.
The correct name, delivery address and amount owed by client must be documented/printed on the invoice.
Drivers must enter client details and amounts received from C.O.D clients in the C.O.D column provided on their respective trip sheets.
The client accepting the goods must sign the invoice in full and driver’s tripsheets to acknowledge payment and the receipt of goods.
All cheques received must be restrictively crossed as they are received, as this makes it more difficult to “cash” the cheques should they be stolen.
All cash and cheques received by driver must be entered into a receipt book and handed to the COD clerk.
COD clerk must sign driver receipt books when monies are received.
Receiving and recording sales and payment
Administration clerk must immediately query, when long outstanding invoices are presented for payment, at the time when he/she matches receipts and credit notes to invoices, on the system.
The incorrect matching of receipts with invoices (and indeed credit notes) is expressly forbidden and will be construed as tantamount to a fraudulent practice.
Branch managers must make 100% certain that staff members are under no illusion as to the serious implications that will arise from infringements in this area.
Separation of responsibility should be exercised, whereby a senior official, (not the same person receiving COD’s), must query outstanding C.O.D’s older than forty eight hours (48 hours).
Branch administrator must ensure that Daily Summary Sheets are accurate (agreed to system receipt reports) and timely banked (no later than the following morning) and authorised by him/her and the branch manager.
COD reconciliations
Each branch must reconcile the daily closing balance on all COD accounts and not just record the daily movement on the accounts-this task is in itself a standard daily requirement but does not in itself constitute reconciliation.
The reconciliation must show the individual items that make up the days closing balance on the COD accounts.i.e. a full list of all outstanding items, whether they are debits or credits that comprise the balance.
All individual items listed should be identified with full explanation for overdue amounts in theory, any unrecovered amounts older than 24 or 48 hours, at the most, are overdue.
If there are differences between the total of your list and the debtor’s ledger balance then this difference must be clearly identified.