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Sales / Cash Banked

Question asked by Steven Graham 6 years ago

Hi,

I am evaluating Clearbooks for my salon and hoped someone could advise me on the best way to record sales and deal with discrepancies between sales and cash banked. I'm coming from Xero so my methods will be from that system, please correct me if I'm doing it wrongly for Clearbooks.

Assuming it's a cash only business, for daily sales I intend to raise a sales invoice against a customer called Sales, with the daily sales noted therein. When the cash is banked at the end of the week, I'd pay the invoice from the bank account transaction, this would then be considered reconciled. My issue is that there are sometimes discrepancies between the sales total and cash banked - it can be up or down by up to a few pounds, nothing to worry about other than staff errors due to lack of change, lack of attention etc. I'm confident that over the financial year it all balances out.

Dealing with the errors aside, how do I deal with this discrepancy when reconciling? Do I post the offending negative or positive balance to another account?

Many thanks in advance,

Steven.

3 Replies

Hi Steven

Two of my clients operate in a similar way to that described by Vanish however, there's no need to raise an invoice and pay it off, in that their daily sales are recorded as "money in" to the Cash Account, recording the net sales & VAT, which actually generates a system invoice to "Sales Customer", and pays it off.

Every few days (or weekly in your case) when the money is banked, you merely transfer the sum banked from the cash account to the bank account leaving your differences in the cash account. In my clients' cases the discrepancies tend to be expenses paid out of the tills and so these are merely recorded as "money out" of the cash account to "staff refreshment", "post" or whatever else it's used for.

In their cases their takings also include credit card receipts, which can take days or even a week to hit the bank account, and so these are transferred immediately from cash to another dummy banks account called "PDQ" and as the credit card monies hit the main bank account, they are recorded as transfers from PDQ to bank. The balance on the PDQ account therefore represents credit card takings still hanging about in the banking system.

Using money in & out between "bank" accounts is far easier to handle than leaving under or over payments against invoices, it also makes sure that businesses that account for VAT on a cash basis record VAT properly on the daily cash takings, and not just on bankings.

Hope that makes sense.

Hello Steven,

Thanks for choosing Clear Books.

The best way would be to have a customer named Sales from Salon or something similar.

You will make sales invoices on the system and then you will allocate it to a bank account.

You can have a cash bank account and then a normal high street bank account. You will then allocate your sales invoices to the cash bank account and then transfer to the high street bank. This is not entirely necessary but it will be better in the long term.

The small adjustments which are from error can be done via a journal at the end of the year or on a quarterly basis.

As a new user, please can you look at the user guide below. It will give you greater insight into the system which may help you.

http://www.clearbooks.co.uk/support/user-guide

Vanish

Hi Steven

Two of my clients operate in a similar way to that described by Vanish however, there's no need to raise an invoice and pay it off, in that their daily sales are recorded as "money in" to the Cash Account, recording the net sales & VAT, which actually generates a system invoice to "Sales Customer", and pays it off.

Every few days (or weekly in your case) when the money is banked, you merely transfer the sum banked from the cash account to the bank account leaving your differences in the cash account. In my clients' cases the discrepancies tend to be expenses paid out of the tills and so these are merely recorded as "money out" of the cash account to "staff refreshment", "post" or whatever else it's used for.

In their cases their takings also include credit card receipts, which can take days or even a week to hit the bank account, and so these are transferred immediately from cash to another dummy banks account called "PDQ" and as the credit card monies hit the main bank account, they are recorded as transfers from PDQ to bank. The balance on the PDQ account therefore represents credit card takings still hanging about in the banking system.

Using money in & out between "bank" accounts is far easier to handle than leaving under or over payments against invoices, it also makes sure that businesses that account for VAT on a cash basis record VAT properly on the daily cash takings, and not just on bankings.

Hope that makes sense.

Many thanks to you both for taking the time to reply, Paul's method would probably suit me best.

Cheers,

Steven.

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