Aat Certificate Element 30.1 Week 5[1]


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Aat Certificate Element 30.1 Week 5[1]

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