Balancing the Cash & Bank Deposits

Setting Up the Cash Drawer:
Generally there is a set amount of cash in the cash drawer depending on sales volume.
The cash drawer should start and end the shift with this amount. At the end of the shift, the cash taken out of the drawer should equal the amount of the cash specified on the Bank Deposit Worksheet, which prints from Daily Close #1. (Daily Close #1 should be run at the end of the shift in order to coincide with the Cash Drawer.)
The Bank Deposit Worksheet includes any payments posted as Customer Payments in Post Customer Payments.
If Back Office staff balance the cash, rather than the counter staff, a second cash drawer may be required to swap with the first cash drawer when the Daily Close is run. This allows counter staff to carry on independently of the Cash Balancing.

Paid Outs & Miscellaneous Expenses:
Paid Outs for miscellaneous expenses, such as parts, meals, gas and other expenses, should NOT come out of the Cash Drawer. Instead, a Petty Cash Box should be utilized and balanced separately.

What is Cash Clearing?
The Cash Clearing Accounts contain all cash entries from the day's invoices, customer deposits and customer payments. They are setup by method of payment in Method Of Payment Codes. This is the cash in the drawer, that has NOT YET been taken to the Bank.

Balancing the Cash Clearing Accounts:
A Cash Over/Short feature can be activated in the Company Daily Close Parameters.
This processing provides an on-screen cash-out reconciliation by method of payment from Daily Close 1, and automates the postings to the bank from the clearing accounts setup in Method Of Payment Codes . This processing also allows for an Expense Percent for Credit Card payment methods, where a percent fee is paid when the deposit is made. Any Cash discrepancies are posted by currency to the Cash Over/Short account assigned in Default Accounts .
The clearing transactions are printed and posted with the Rental Journal Transactions in Daily Close 3.
Use of this feature ensures that the cash clearing account always balances with the actual Cash On Hand.
If the on-screen Cash Over/Short option is NOT activated, then a journal entry for each bank deposit is required, after the cash has been manually balanced and reconciled.

Manual Balancing the Cash:
Part of Daily Close 1 is the Bank Deposit Worksheet.
This report summarizes the cash receipts by Division (location), and then lists the Grand Total for that DBR. Balance your cash receipts against this report.
The difference between cash received and the Bank Deposit Worksheet will be Cash Over or Cash Short.
If it is difficult to balance your cash, print the Method Of Payments Detail Report when running Daily Close 1 . For each Method of Payment, each customer name, amount and source - reservation, contract or invoice #, is listed.
This should help track down any discrepancies.
Bank Deposits should be done every day, to maximize your Cash Flow. If your firm does not make daily Bank Deposits, several DBR's will need to be added together in order to represent the days covered by the Bank Deposit. As an alternative, just run the Daily Close programs when a Bank Deposit is to be made, and not on a daily basis, as recommended earlier.

Making the Manual Bank Deposits Postings:
To reconcile the Cash Clearing Account with the Bank Deposit, make a journal entry through Miscellaneous Journals . This Journal Entry will transfer the money from the Cash Clearing Account to the main BANK account. This results in a G/L Bank Account that looks identical to your Bank Statement, and prevents the G/L Bank Account from containing unreconciled cash detail entries.

Resulting Journal Entry:

D/C    G/L Account       Amount
---    -----------       ------
Credit Cash Clearing     the amount equal to the Bank Deposit Worksheet

Debit  Bank Account      with the Bank Deposit amount

Debit  Bank Account #1   with the amount equal to the Direct Bank Deposit for Bank #1
                         e.g. VISA (use the amount actually deposited to the bank)

Debit  Bank Account #2   with the amount equal to the Direct Bank Deposit for Bank #2
                         e.g. MASTERCARD (use the amount actually deposited to the bank)

Debit  Credit Card Dsct  with the Visa, American Express, etc, Discounts (if applicable)

Debit  Cash Over/Short   with the Cash SHORT Amount

Credit Cash Over/Short   with the Cash OVER Amount

Note: Bank #1 & Bank #2 in the example.
Often firms will have an direct deposit machine, whereby all Visa, MasterCard, Debit Card, etc. automatically are deposited into the bank at day's end.
If the payment entries are split into different Banks, separate totals for Bank #1 and Bank #2 are needed, i.e. Visa and Debit goes to Bank #1, but MasterCard goes to Bank #2. The recommended journal entry above reflects this.

Example of the Daily Close 1  - Bank Deposit Worksheet
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                            LONGVIEW RENTALS
                            BANK DEPOSIT WORKSHEET - DBR # 325


DIVISION __:  HEAD OFFICE

PAYMENT METHOD   _____ : CASH........................:          115.15
PAYMENT METHOD       V : VISA........................:          756.42
PAYMENT METHOD      CH : CHECK.......................:         1428.43
PAYMENT METHOD      MC : MASTERCARD..................:          200.00
                                                               2500.00

REPORT TOTALS INCLUDE CUSTOMER PAYMENTS

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Bank Deposit Example - HAND WRITTEN

D.B.R. #325
-----------
Bank Deposit Worksheet Total (from report above)           2500.00
Bank Deposit (Cash & Checks: actual deposit)               1540.58
Bank #1 Direct Deposit Amount (Visa)                        741.30
Bank #2 Direct Deposit Amount (MasterCard)                  200.00
Credit Card Discounts   (see * below)                        15.12
                                                           -------
Cash Over/Short (short)                                       3.00

Example: Visa Discount:

$756.42 * 2% = $ 15.12  *

Gross Visa -  Discount  =  Net Visa Deposit
   $756.42 -   $15.12   =   $741.30

Example of a Bank Deposit Entry in Miscellaneous Journals:

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                       MISCELLANEOUS JOURNALS

JOURNAL ENTRY NUMBER......:       50      JOURNAL TOTAL:  0.00
TRANSACTION DATE..........: 09/30/20XX      TRANS TOTAL:  0.00

SEQ#   ACCT#       DESCRIPTION          DIV  TRANS AMOUNT   D/C  SOURCE
----   -----       -----------          ---  ------------   ---  ------
001    1100        CASH CLEARING                 2500.00     C    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: WORKSHEET TOTAL

002    1000        BANK - ROYAL BANK             1540.58     D    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: CASH & CHECKS DEPOSIT

003    1000        BANK - ROYAL BANK              741.30     D    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: VISA - DIRECT DEPOSIT

004    1001        BANK OF MONTREAL               200.00     D    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: MASTERCARD - DIRECT DEPOSIT

005    6090        CREDIT CARD DISC.               15.12     D    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: VISA DISCOUNTS

006    6080        CASH/OVER SHORT                  3.00     D    JN50
    REF:  BANK DEPOSIT DBR 325         DETAILS: CASH SHORT

             ENTER TO CONTINUE ____

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