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Aat Certificate Element 30.1   Week 5[1]
 

Aat Certificate Element 30.1 Week 5[1]

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

    • AAT CERTIFICATE ELEMENT 30.1 Receiving and Recording Payments Chapter 5
    • SESSION SUMMARY
      • Homework review
      • Incoming payments
        • Cash
        • Cheque
        • Credit card and debit card
        • Inter-bank transfer
      • Checking payments against documentation
      • Recording money received
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
    • 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
      • 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)
    • 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
    • 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
    • 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
    • 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
    • SESSION HOMEWORK
      • Complete any unfinished exercises
      • Read and review session notes and Chapter 5
      • Exercise 5.1, 5.2, 5.3 (workbook)