CHAPTER 8 Flashcards
Authorising & making payments
Controls over payment
- Documentation
- Authorisation of the expenditure of item
- Authorised signature for cheques & payment instructions to bank
- Secure controls over electronic payments
Authorisation of payment
- Which individual can authorise
- Maximum amount they can authorise
- when authorising, put signature or initials
- no signature/initials = payment refused
Cheque requisition form
When primary documentation such as an invoice has not been received
- A form requesting that a cheque should be drawn
Expense claim form
Employees want to claim back the money from their organisations after making payments using their own money for items of business expense
Payment method : Cash
- Small payments
Payment method : Cheque
- One-off transaction
- Not appropriate for monthly deductions
Payment method : Automated payments (BACS)
- Salaries & wages
Signatures on business cheque
- Names & Signature of the person sign the cheque must be :
→ supplied to the bank
→ on a Bank Mandate Form
Crossed cheque
Two lines drawn across and “A/C Payee” printed between the lines
⦿ can only be paid into the account whose name appears on the cheque
⦿ can’t be cashed
Cheque sent to payee with remittance advice or??
Covering letter
Stopping cheque
1) Telephone bank
2) Written instruction
Bank giro credits
- Credit transfer
- Usually received from customer
- Can also for electricity, telephone and water companies bill
1) Fill in bank giro credit transfer from
2) Handing the form together with payment (cash/cheque) at bank
Who use bank giro credits?
Suppliers like :
- Telephone companies
- Water companies
- Electricity companies
- Small companies pay wages
Banker’s draft
- Cannot be stopped/cancelled
- Large payments involved
Standing order
- Paying business set up the arrangement
- Regular payments
- Fixed amount
- Standing order mandate
Direct debit
- Person RECEIVING the payment initiates each payment
- Regular payment
- Variable/fixed amount
- Telephone/gas/electricity/water bills
- company being paid will inform payer of amount & date each payment
- Direct Debit Instruction
1) Paying company fill in
2) Sent to supplier
3) Supplier sent to bank
Explanatory document to go with payments
- Remittance advice
- Order form (payment sent with order)
- Pro-forma invoice (payment with order,, sale/return transaction)
- Bank giro credit form
- Covering letter (when other documents takde)
There might be 2 remittance advices ?
Yes.
1st : Sent with supplier statement
2nd : Prepared by customer’s account department –> sent to supplier with payments
