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Aat Certificate Element 30.1   Week 5[1]
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Aat Certificate Element 30.1 Week 5[1]

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  • 1. AAT CERTIFICATE ELEMENT 30.1 Receiving and Recording Payments Chapter 5
  • 2. SESSION SUMMARY
    • Homework review
    • Incoming payments
      • Cash
      • Cheque
      • Credit card and debit card
      • Inter-bank transfer
    • Checking payments against documentation
    • Recording money received
  • 3. RECEIVING PAYMENTS (1) CASH
    • Notes checked for forgery
    • Receipt usually provided
    • Most daily takings will be banked, with some retained as a cash float
    • Guidelines for cash handling:
      • Secure storage
      • Minimum cash held in tills
      • Cash should be banked as soon as is practically possible
      • Refer pp 86-87 Exercises 5.1, 5.2, 5.3
  • 4. RECEIVING PAYMENTS (2) CHEQUES
    • Three parties:
      • Drawee (bank)
      • Drawer ( issuer of the cheque)
      • Payee (recipient of the cheque)
    • Cheque must be examined for signature, correct payee, date, amount
    • Refer pp 88-89
  • 5. CHEQUES - CROSSINGS
    • Cheques usually crossed
    • A crossed cheque may only be paid into a bank account
    • Types of crossings:
      • General
      • Special
      • Account payee
      • Refer pp 90 Exercises 5.4 – 5.8
  • 6. RECEIVING PAYMENTS (3) MULTIFUNCTION CARD
    • Combine a number of functions
      • Giving cash from ATM’s
      • Cheque guarantee (upper limit)
      • Act as a debit card (make payment without the use of a cheque)
    • Businesses which accept payment from such cards must be familiar with the relevant handling procedures
    • Refer pp 91 for example
  • 7. RECEIVING PAYMENT BY CHEQUE AND GUARANTEE CARD
    • The issuing bank’s conditions must ultimately be adhered to
    • Main procedural checks:
      • Examine card generally for authenticity
      • Check card details
      • Examine the cheque
      • Card and cheque should match
      • Write card number on cheque reverse
    • Note: the cheque card guarantee covers only one transaction
    • Exercises 5.9, 5.11
  • 8. RECEIVING PAYMENTS (4) DEBIT CARDS
    • Enables payment to be made directly out of a current account without the need for a written cheque
    • For payment to be accepted, the seller must process the card by using either:
      • A manual sales voucher (rarely) OR
      • An electronic terminal
  • 9. RECEIVING PAYMENTS (5) CREDIT CARDS
    • Examples: VISA, Mastercard
    • Typically issued by banks, building societies, retail chains (storecards)
    • Credit limit set on each cardholder’s account
    • Can be used at counter, mail order, telephone, internet sales
    • Retailers use a card merchant to process card payments
    • Cardholder is sent a monthly statement of purchases made and can opt to either pay the outstanding amount in full, or make part payment
    • Some credit card companies charge an annual fee as well as interest on unpaid balances
  • 10. ACCEPTING CARD PAYMENTS COUNTER SALES - MANUALLY
    • The business accepting payment will use either a manual imprinter or and electronic till/terminal
    • Usage of a manual imprinter involves the seller making a number of checks, including the floor limit
    • A sales voucher is handed to the customer
    • A copy of the sales voucher is retained in the fill and treated in the same way as a cheque; it will eventually be banked
    • The manual system is very rarely used nowadays
    • Refer pp 96-97
  • 11. ACCEPTING CARD PAYMENTS THROUGH A TERMINAL
    • Electronic terminal used for both debit and credit card transactions
    • The terminal makes contact with the card merchant’s system to check:
      • Card number
      • Card status (ie not lost/stolen)
      • Sufficient customer funds limit
    • Floor limit will also be checked
    • The amount of the transaction is automatically from the customer’s credit card or bank account
    • The transaction amount is added to the seller’s bank account
    • Refer pp 95-96
  • 12. ACCEPTING CARD PAYMENTS MAIL ORDER & TELEPHONE SALES
    • The seller must go through a similar procedure as ‘counter’ sales:
      • Obtain key customer and card details
      • Floor limit check
    • The transaction can be processed manually or electronically
    • Some organisations will use a Mail Order Schedule to record transactions
    • Refer pp 97
  • 13. ACCEPTING CARD PAYMENTS FLOOR LIMITS & AUTHORISATIONS
    • Floor limit: the maximum transaction amount set by the card merchant company
    • Where the transaction exceeds the floor limit, business will seek authorisation, either by telephone or electronically
    • Authorisation may also be sought if the terminal indicates that the card is not valid, or if the business has other suspicions
    • Authorisations are crucial as the business may lose the money if they are not carried out
    • Refer pp 98 Exercises 5.10, 5.12. 5.13
  • 14.
    • The system by which debit and credit cards are processed via an electronic terminal
    • Funds are transferred at point of sale
    • Benefits of EFTPOS:
      • Reduced transaction processing time
      • More secure (no cash)
      • Guaranteed payment (once authorised)
    ELECTRONIC FUNDS TRANSFER AT POINT OF SALE (EFTPOS)
  • 15. INTERNET PAYMENTS
    • Acceptance of debit/credit card payments ensures immediate payment
    • Business will receive a schedule of payments received
    • Current issues stem from customer concern regarding security of card details
  • 16. PAYABLE ORDERS
    • A business may accept payment by other means:
      • Postal orders (issued by Post Office)
      • Bank drafts (issued by a bank where payment is guaranteed)
      • Building society cheques (guaranteed; similar to bank)
    • Payment via either of these means can be paid into the bank, similar to a cheque
    • Refer pp 98-99 Exercise 5.14, 5.15, 5.16
  • 17. CHECKING PAYMENTS AGAINST DOCUMENTATION
    • The customer will advise of payment by issuing a remittance advice
    • Payments can be received through the post or inter-bank transfers
    • Business accepting payment will need to check each advice against the bank statement to check that the correct amount has been received
    • Refer pp 100-101
  • 18. RECORDING MONEY RECEIVED
    • Cash book (next session)
    • Cash tills
      • Actual cash will be checked against till roll or electronic till memory
    • Remittance lists
      • Cheques and other monies received recorded manually on remittance list
    • Remittance lists/cash received lists
      • Absence of cash register
      • Can be used to record payments received over the counter
      • Refer pp 102-103
  • 19. SESSION HOMEWORK
    • Complete any unfinished exercises
    • Read and review session notes and Chapter 5
    • Exercise 5.1, 5.2, 5.3 (workbook)