6. RECEIPTS - CASH & CHEQUE COLLECTIONS

6.1. Definition:

This policy describes the general guidelines and control procedures for the management of cash and cheque collections to ensure that all collections are promptly paid into the Church’s current account with the respective banks.

6.2. Controls & Responsibilities:

6.2.1. The Office Administrator is responsible for the smooth and efficient administration and control of all collections including cash, cheques, credit card payments and all other financial instruments.

6.2.2. When cash is received, it must be acknowledged by issuing an official receipt which should have a counterfoil or a carbon receipt.

6.2.3. Receipts should be consecutively numbered. Unused receipts or receipts incorrectly issued must be cancelled (with the words ‘CANCELLED” written across the page) and must not be detached from the counterfoil. No blank counterfoils should be accepted.

6.2.4. As soon as cash is received, it must be entered in the Collections Book.

6.2.5. All cheques received should be crossed and the transactions entered in the Collections Book.

6.2.6. Cheques received for the day should be deposited in the bank within the day or the next morning.

6.2.7. A Bank reconciliation statement should be prepared at the end of each month or immediately upon receipt of the Bank statement.

6.3. Procedures on collection and banking-in of cheques:

6.3.1. It is the responsibility of the Office Administrator to ensure that all monies due are collected promptly.

6.3.2. Cash Collections:

(a) Every cash payment that is received by the Office Administrator must be counted in front of the payer so that short-payment or over-payment can be immediately alerted to the payer concerned.

(b) An Official Receipt must be issued for each cash transaction that is received, duly signed and handed over to the payer.

(c) Particulars on the receipt must be clearly recorded to reflect an accurate description of the payment.

(d) The cash received must be kept in a locked drawer.

(e) Enter each collection into the Collections Book immediately.

(f) At a suitable or scheduled time of the day, the cash collections must be properly accumulated and segregated into respective denominations e.g. RM1.00, RM5.00, etc. Count the cash again and write the amount in the bank cash pay-in slip. This total must agree with the total of the cash recorded in the Collections Book. Any discrepancy discovered, should be immediately reconciled and if such discrepancy still exists, this must be reported to the PFC or the Parish Priest.

6.3.3. Cheques Received:

(a) Upon receipt of a cheque

(i) Ensure that:

• The cheque is correctly dated.
o A post dated cheque is not valid prior to the date shown on the cheque.
o A cheque that is dated more than six (6) months prior to the current date of banking is considered a “stale” cheque and will not be accepted by the bank.
• Amounts in words and figures tally.

• The cheque is duly signed.

• A company cheque is duly stamped with the company’s chop.

• The cheque is crossed “A/c Payee Only – Not Negotiable”. Almost all banks have this crossing pre-printed on the cheque for security reasons.

If any of the above discrepancy is discovered, the Office Administrator must contact the payer to replace the cheque where required.

(ii) Determine what the payment is for so that the correct description can be recorded. Cheque payments are usually accompanied by a covering letter or document which provides sufficient information on the purpose of payment. In the event that such document or information is not available, the Office Administrator must contact the payer for the relevant information in order that the correct account can be posted.

(b) For cheques that contain no errors, the transaction must be recorded in the Collections Book which can be manually maintained or updated in a spreadsheet on the computer for such purpose. Essential details to be recorded are (i) date of receipt of cheque, (ii) name of payer, (iii) particulars of payment, (iv) amount in figures, (v) date paid into bank and (vi) official receipt number.

(c) Cheques must be paid into the Church’s bank account as soon as possible but no later than 2 working days upon receipt of such cheques. For cheques that are deposited over the counter with the bank teller, a duly receipted bank pay-in slip must be obtained and placed on file for audit & inspection purposes. Likewise for cheques that are deposited into the bank’s cheque deposit machine, the machine printed receipt has to be filed for the same purpose.

(d) A pre-numbered official receipt must be issued for each cheque upon clearance by the bank. Please refer to the sample official receipt in the section for Sample Documents. Reference should also be made to the section on “How to Complete an Official Receipt”.

(e) Where a payment is made directly by a payer into the Church’s bank account, whether by cheque, telegraphic or inter-bank transfer, the Office Administrator must obtain from the payer relevant documents or particulars to ensure that the transaction is correctly posted in the Church’s account books.

6.3.4. Returned cheques:

(a) A cheque that is not cleared by the bank will be returned to the Church for further attention.

(b) There are various reasons as to why a cheque is returned by the bank such as (i) incorrect or irregular signature(s), (ii) amount in words and figures differ, (iii) cheque not signed by the drawer, (iv) drawer’s stamp or chop required, (v) refer to drawer, (vi) insufficient funds, (vii) account closed and (viii) payment stopped by the drawer.

(c) As part of the instructions to the bank for the operation of the current account, the bank must be instructed to immediately notify the Church Office Administrator as soon as a cheque is dishonoured or returned so that immediate contact can be made with the drawer of the uncleared cheque.

(d) In respect of cheques that are returned due to technical errors, the drawer of the cheque should be contacted immediately to re-issue a fresh cheque. Upon receipt of the fresh cheque and after checking that the information on the cheque is correct, the error cheque can be returned to the drawer or payer.

(e) If a cheque is returned due to insufficient funds or the payer’s bank account being closed, it is important to demand cash settlement instead of receiving a re-issued cheque.

(f) Before the close of office each day, it is necessary to check that the “Receipts” transactions entered into the Collections Book agree with the transactions as shown in the respective bank “pay-in” slips. Any differences must be immediately reconciled so that an accurate accounting record can be maintained.

SAMPLE OF OLOG’S OFFICIAL RECEIPT

6.3.5. Credit Card Transactions:

(a) Following the set-up of the Community Centre Building Fund, credit card facilities are made available by Malayan Banking Bhd to process credit card payments.

(b) There are two methods of payment – (a) random payments and (b) scheduled payments.

(i) Random payments refer to those credit card payments that are made by donors as and when convenient to them.
a. A credit card is usually presented by the donor upon payment of the donation.
b. The credit card is then swiped by the Church Office Administrator.
c. If the transaction is in order, a credit card slip is printed in duplicate.
d. Present one copy to the payer for his signature and hand to him a duplicate unsigned slip for his records.
e. Immediately enter the transaction in the Credit Card record book or the computerised record sheet.
f. Issue an official receipt to the donor for the transaction that has been accepted by the credit card company. Attach the credit card slip (that was duly signed by the payer) to the counterfoil of the receipt book.

(ii) Scheduled payments refer to credit card payments where donors have pledged to pay a certain sum on a specific date each month or each quarter or half-yearly.
a. A credit card authorization form contain full details of the credit card number, expiry date, security code and signature of the donor is or has to be presented to the Church office before scheduled posting of such credit card transaction takes place.
b. Such authorization forms must be accurately filed to segregate the periods/months in which the scheduled payments are to take place.
c. As soon as a transaction is entered into the credit card transaction processing machine, print duplicate copies of the credit card slip – one copy to be attached to the official receipt counterfoil when the respective receipt is issued if required by the donor; the 2nd copy is to be attached to the original receipt and sent out to the donor as evidence that such a transaction has taken place. In cases where the donor does not require the issuance of receipts, only one copy of credit card slip is printed for filing into the individual donor’s file.
d. Enter the transaction in the Credit Card record book or the computerised record sheet immediately.
e. Issue an official receipt, to be posted or handed over to the donor if required by the donor.