Admas University

Kality campus
Department of accounting

Occupational Standard: Accounts and Budget Support Level III

Unit of competence: Prepare, Match and Process Receipts

Learning material

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In this unit you are required to prepare, match and process a range of financial receipts.

Receive, identify and record receipt: Check all receipts for accuracy against remittance document, all
receipts are accurately recorded, remittance types are accurately identified to ensure correct allocation,
processing is completed

Match receipts to documentation: All receipts are checked and matched to documentation accurately.
Unmatched receipts are noted for follow-up

Enter data to systems: All receipts are accurately allocated to appropriate chart of account areas, data is
entered to systems without error and within time requirements, all receipts are accurately matched to
system debit, reconciliations are completed and discrepancies between general ledger and sub systems are
resolved

File documentation: All documentation is filed promptly and the location of filed documentation is
traceable

Lo1. Receive, identify and record receipts

 Established procedures are followed and receipts are checked for accuracy against remittance documents
o Receipts may include:
 bankers orders
 cash
 cash journal entry
 cheques
 credit cards:
 direct
 mail
 telephone
 direct debits
 direct drawing
 payroll deduction
 postal money order
 All receipts are recorded with remittance types accurately identified to ensure correct allocation in
accordance with organization policy and procedures
o Organization policy and procedures may include:
 computer systems documentation
 internal control guidelines
 operations manuals
 Batching is completed in accordance with organization systems and operating procedures and relevant
departments advised of total daily receipts

Lo2. Match receipts to documentation

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  Receipts are checked and matched to documentation accurately and promptly and documentation security
maintained to protect interests of all parties to transaction
 Unmatched receipts are noted for follow-up or referral in accordance with organization, industry and
legislative requirements
o Industry and legislative requirements may cover:
 Cash Transaction manuals
 credit directives
 industry codes of practice
 relevant Insurance law
 Taxation proclamation

Lo3. Enter data to systems

 All receipts are accurately allocated to appropriate chart of account areas and data entered onto receipt
systems without error and within time requirements specified in relevant organization policy and procedures
 Receipt systems may include:

 Assets
 cash receipts debiting
 commissions
 investment
 loans
 receipting system may take account of optimising legislative requirements including
Financial Institutions Duty
 computer based
 manual
 All receipts are accurately matched to system debit with any data and allocation discrepancies identified
promptly to enable early follow-up
 Data and allocation discrepancies may include:
 incorrect account allocation
 Key stroke error
 Advice on source and solution to discrepancies is sought, where necessary, to solve outstanding problems
 Related systems are updated, reconciliations completed and discrepancies between general ledger and sub-
systems resolved

Lo4. File documentation

 Documentation is filed promptly in accordance with organization policy and procedures

 Location of filed documentation is accessible and easily traceable when required

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LO 1. RECEIVE, IDENTIFY AND RECORD RECEIPTS

What is a receipt?
 Receipts A written acknowledgment of having received, or taken into one's possession, a specified
amount of money, goods, etc.
 Receipts, the amount or quantity received. The act of receiving or the state of being received.
Something that is received.
 A receipt is a written acknowledgment that a specified article or payment has been received. A receipt
records the sale of goods or provision of a service.
 A receipt is a confirmation of a payment. This document confirms a customer has received the goods or
services. A customer can use a receipt a proof of a completed payment for goods or services.
In some countries, it is obligatory for a business to provide a receipt to a customer confirming the details of a
transaction. In most cases the recipient of money provides the receipt, but in some cases the receipt is generated
by the payer, as in the case of goods returned to a store for a refund. A receipt is not the same as an invoice.
Receipts may also be provided for non-retail operations such as banking transactions.
Classification of Receipts:

1. Capital Receipt: It is not obtained during normal business activities. For example, capital contributed
by owners and receipts from sale of fixed assets.
2. Revenue Receipt: It is obtained during normal business activities. For example, Discount Received,
Rent Received and money earned from selling goods and services.
Manual receipts
Hand-written or hand-completed receipts are more often used for infrequent or irregular transactions, or for
transactions conducted in the absence of a terminal, cash register or point of sale: for example, as provided by a
landlord to a tenant to record the receipt of rent.

When is a Cash Receipt Generated? A cash receipt is generated when a vendor accepts cash or cash
equivalent from an external source, such as a customer, an investor or a bank.

The following information is featured in a cash receipt -

 The date on which the transaction happened

 The unique number which is assigned to the document for identification
 The name of the customer
 The amount of cash received
 The method of payment i.e. whether the payment is done by cash, cheque etc.

When to Deposit All cash receipts should be recorded and deposited within 24 hours of receipt unless amounts
total less than $500, and then at least weekly , in Ethiopian context cash must be deposited if it Idle that mean out
purpose and above 100 br
Use of RIF (Receipt Identification Form)
Use the on-line Receipt Identification Form (RIF); to record receipt of any of the following forms of payment.
 Currency Coin
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  Checks Drafts
 Money orders Traveler’s checks.
Certain items may be accompanied by supporting documentation that becomes part of the deposit record,
Do not use RIF to record:
 Returns of Payroll Overpayments
Do not enter a RIF for receipts intended to return an overpayment of salary or benefits. The Payroll Department will
enter all returns of overpayments.
 Repayments of Accounts Payable Charges
Do not enter a RIF for receipts intended to repay charges that were initially incurred through Accounts Payable.
Examples of such receipts are:
 A refund check for an order that was reduced or canceled
 Receipts that are intended to modify an existing invoice or purchase order that has already been paid
 Repayment of an outstanding travel or expense advance.

 Gift Income Received in the Department

Most often, contributions are sent directly to the Development Office and deposits are processed by the Contribution
Processing unit within that office.
What is an invoice?
In simple words, an invoice is a document a business issues to customer. It states sold products or services and
the amount of money to be paid. Invoices serve as a request for payment and are sent before a customer makes a
payment. They are used to effectively keep track of the sold items, their prices, taxes, and other transaction-
related information. Usually, invoices are issued after the service or goods have been delivered while the
payment has not been made yet. Invoices were widely printed and sent via post or fax in the past. However, in
2021 and beyond, online invoices sent in a pdf format via email are a more cost-effective, convenient, and more
eco-friendly solution. Keeping track of invoices with one unified invoicing system helps reduce administration
around accounting and reporting.
What is a bill?
A bill states the due amount to be paid by a customer. When a business sends an invoice to a customer, a
customer has to input the invoice information in the form of a bill in their booking system. A bill is created
before payments.
What is the difference between receipt, bill, invoice and voucher?
Receipt: A receipt is a document acknowledging that a person has received money or property in payment
following a sale or other transfer of goods or provision of a service. All receipts must have the date of purchase
on them. In some countries, it is obligatory for a business to provide a receipt to a customer confirming the
details of a transaction. In most cases, the recipient of money provides the receipt, but in some cases the receipt
is generated by the payer, as in the case of goods being returned for a refund.
Invoice: An invoice is an acknowledgement issued by the vendor to the purchaser of goods sold or services
rendered by him/her. It is a non-negotiable legal document which identifies the buyer and seller of the stuff. It
contains details regarding quantity, price, discount, taxes, the total amount due for the payment, invoice number,
date of issue of invoice, seller’s signature, and any additional payment terms, like if the company is giving their
customer the option to pay monthly payments versus one amount.
Bill: Bill is defined as a statement of fees or charges which contains the list of items along with their prices that
is provided from the seller to the buyer regarding the products bought by the buyer. A bill is typically more
immediate than an invoice, with the sender providing the bill right away and requiring prompt payment, usually
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without the option of payment terms. For example, if you eat out at a restaurant, you’ll receive the bill for your
food before you leave the building and you are responsible for paying it immediately.
Voucher: In Accounting terms vouchers mean a document for recording transactions that serves to confirm or
witness (vouch) for transaction. Commonly, a voucher is a document that shows goods have bought or services
have been rendered, authorizes payment, and indicates the ledger account(s) in which transactions have to be
recorded. A voucher is a bond of redeemable transaction type which is worth a certain monetary value and
which may be spent only for specific reasons or on specific goods

LO 2. MATCH RECEIPTS TO DOCUMENTATION

Understanding the Receiving Process

You can use either an informal or formal receiving process to acquire the goods and services that you requested on a
purchase order. You must use the formal receiving process if you purchase items to inventory; you can use the
informal or formal receiving process if you purchase items or services to the general ledger.

Informal Receiving Process; An informal receiving process is one in which you enter receipt information at the
same time that you create a voucher. If you create a voucher for 50 pens, the system determines that you received 50
pens.

Formal Receiving Process; A formal receiving process is one in which you enter details of a receipt before you
create vouchers. You create vouchers based on the receipt information. For example, if you enter a receipt for 50
pens, you must create a voucher for 50 pens.

To accurately account for the receipt of goods, the formal receiving process is likely to include:

Taking physical receipt of items, Identifying details of the receipt, recording details of the receipt.

Reviewing Journal Entries for Receipt Transactions

This section provides an overview of journal entry review for receipt transactions and discusses how to: Review
journal entries for receipt transactions, Post receipts.

Understanding Journal Entry Review for Receipt Transactions

The system creates journal entries each time you enter or reverse a receipt. You can review the journal entries for
accuracy and then post them to the general ledger.

Posting Receipts; to post receipts, select Receipts Matching and Posting, G/L Receipt Post.

After you review journal entries, you can post them to the general ledger using the General Ledger Post program

Printing Receipt Information;

You can print receipt information that is specific to purchase orders, suppliers, business units, and so forth. You can
print the Open Purchase Order Status report to review purchase orders containing items that are overdue. For each
purchase order that you specify, you can review this detail line information: Original order quantity, Received
quantity, Supplier Days overdue, User ID,

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The entire report a total open amount is provided for, Order number, Line number Etc...

Understanding Purchase Receivers; a purchase receiver is a document that you use to manually record the receipt of
goods upon delivery. A purchase receiver provides you with: Original purchase order information, Quantities that
you have yet to receive, a column for recording receipt quantities or amounts.

You determine the information that prints on purchase receivers. Processing options enable you to specify whether to
print: Price information, Order quantities, Cross-reference numbers, and foreign currency amounts.

Entering Receipts; this section provides an overview of receipt information, lists a prerequisite, and discusses how
to:

 Set processing options for Receipts

 Enter receipt information.

Understanding Receipt Information; after you receive the goods on a purchase order, you must record the details
of the receipt. The system uses receipt information to:

Update item quantities and costs in the Inventory Management system and Update general ledger accounts.

When you receive goods, you must verify that the details of the receipt correspond to the information on the purchase
order. You must verify item numbers, quantities, and units of measure, costs, and so forth.

Entering Receipt Information; you must enter receipt information to verify the receipt of goods or services on a
purchase order. You must verify the quantity, cost, and so forth for each order that you receive. To enter a receipt,
you must first locate the open purchase-order detail lines that correspond to the receipt. An open detail line contains
items that have not yet been received. The system retrieves all open detail lines for the item number, purchase order
number, or account number that you specify.

Pricing and Re-pricing at Receipts You can price and re-price items at receipt based on quality attributes and changes
in pricing. The system uses contracts and price adjustments to calculate the new item price at receipts.

Note:

If two or more users attempt to receive an order with the same item and branch/plant combination at the same time,
one or more of the users may get a transaction error.

Understanding Receipt Information Printouts You can print receipt information that is specific to purchase orders,
suppliers, business units, and so forth. You can print the Open Purchase Order Status report to review purchase
orders containing items that are overdue.

Information for this report prints in this order:

User ID, Supplier, Order number, Line number, a total open amount is provided for, each purchase order, each
supplier, each user, the entire report.

You can print the Inventory Receipts Register report to review all items that you have received from a supplier.

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LO 3 ENTER DATA TO SYSTEM

Enter data to system is the act of transferring an entry, items/receipts from a book of original entry to the proper
account in to ledger.

Cash Receipts Procedure

The process of receiving cash is highly regimented. This is because the task of processing checks is loaded with
controls. They are needed to ensure that checks are recorded correctly, deposited promptly, and not stolen or altered
anywhere in the process.

The procedure for check receipts processing is outlined below:

1. Record checks and cash. When the daily mail delivery arrives, record all received checks and cash on the
mailroom check receipts list. For each check received, state on the form the name of the paying party, the check
number, and the amount paid. If the receipt was in cash, then state the name of the paying party, check the “cash?”
box, and the amount paid. Once all line items have been completed, enter the grand total in the “total receipts” field
at the bottom of the form. Sign the form, and state the date on which the checks and cash were received. Also, stamp
“for deposit only” and the company’s bank account number on every check received; this makes it more difficult for
someone to extract a check and deposit it into some other bank account.

2. Forward payments. Insert all checks, cash, and a copy of the mailroom check receipt list into a secure interoffice
mail pouch. Have it hand-delivered to the cashier in the accounting department. The cashier matches all items in the
pouch to the mailroom check receipt list, initials a copy of the list, and returns the copy by interoffice mail to the
mailroom. The mailroom staff then files the initialed copy by date.

3. Apply cash to invoices. Access the accounting software, call up the unpaid invoices for the relevant customer, and
apply the cash to the invoices indicated on the remittance advice that accompanies each payment from the customer.
If there is no indication of which invoice is to be credited, record the payment either in a separate suspense account,
or as unapplied but within the account of the customer from whom it came.

4. Record other cash (optional). Some cash or checks will occasionally arrive that are not related to unpaid
accounts receivable. For example, there may be a prepayment by a customer, or the return of a deposit. In these
cases, record the receipt in the accounting system, along with proper documentation of the reason for the payment.

5. Deposit cash Record all checks and cash on a deposit slip. Compare the total on the deposit slip to the amount
stated on the mailroom check receipts list, and reconcile any differences. Then store the checks and cash in a locked
pouch and transport it to the bank.

6. Match to bank receipt upon receipt of the checks and cash, the bank issues a receipt for it. Someone other than
the cashier should compare this receipt to the amount on the deposit slip, and reconcile any differences. It may be
useful to staple the receipt to a copy of the deposit slip and file the documents, as proof that the matching step was
completed.

Understanding Manual Receipts

 Understanding Receipts Entry Methods

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Depending on the type of receipt, you can use either the Standard Receipts Entry or Speed Receipts Entry program to
enter receipts. If you enter unapplied or general ledger receipts you can use either program. To help determine which
method you should use, consider the advantages and limitations of standard and speed receipts entry:

 Understanding the Steps for Processing Manual Receipts

You use the standard three-tier processing steps to manage manual receipts:

o Enter
o Review
o Post

LO4. FILE DOCUMENTATION

Document is a record or the capturing of some event or thing so that the information will not be lost. Usually, a
document is written, but a document can also be made with pictures and sound. A document usually adheres to some
convention based on similar or previous documents or specified requirements. Examples of documents are sales
invoices, wills and deeds, newspaper issues, individual newspaper stories, oral history recordings, executive orders,
and product specifications.

A document is a form of information. A document can be put into an electronic form and stored in a computer as one
or more files. often a single document becomes a single file. An entire document or individual parts may be treated
as individual data items. As files or data, a document may be part of a database.

In the computer industry, documentation is the information provided to a customer or other users about a product or
the process of preparing it. a fact, event, or other thing is to record or annotate it, meaning to put it into some
relatively permanent form so that it can be retrieved later.

Group assignment out of 10%

1. Demonstrate prepare, match and process receipts?

2. Write the activities that should be performed in file documentations?
3. Define manual receipt?
4. Write down the difference between a manual and an electronic receipt?

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Home > What is an invoice? > Invoice definition > Difference between an invoice, a bill and a receipt
Difference between an invoice, a bill and a receipt
An invoice, a bill, and a receipt – these are probably all documents you’ve heard about but you might not
be aware of the subtle differences that make them exactly what they are. So, let’s take a look at each one so
you can be clear about what documents to refer to when you need to and learn the difference between an
invoice, a bill and a receipt. Have a look at our invoice definition before reading this article if you need to
learn what is an invoice before reading this.

Definitions
Invoice
An invoice is an itemized list of products sold or services provided, along with the amount of money owed
for each line item, and the total amount of money owed. An invoice is sent from the biller to the client, in
hopes of being paid within a certain amount of time.

Bill
A bill is something you, as a customer must pay. A bill is an invoice in that it has the itemized list of
products sold or services provided, along with the amount of money owed for each item, and a total amount
owed. However, when you receive an invoice, you would enter it as a bill that you owe. In other words, an
invoice is sent, and a bill is received.

Receipt
A receipt is different from an invoice in that an invoice is requesting payment for products or services
received, whereas a receipt is proof that the services or products have already been paid for. An invoice
comes before the payment has been made, while a receipt comes after the payment has been made.

Differences
So, if you are a vendor, you would send an invoice after a service has been completed and money is owed,
and then you would send a receipt after you receive the payment from the invoice. On the other hand, if
you are a customer, the invoice you receive is your bill, and then you will receive a receipt once you pay
your bill.

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Invoice is sent → Customer receives it as a bill → Payment is made → Receipt

The importance of an invoice and a bill is that it documents the services completed and/or products sold,
along the with the amount owed. The vendor and the customer can use the invoice for bookkeeping
purposes.

The importance of a receipt is that it serves as documentation that the products and/or services has been
paid for and the business transaction is complete. The vendor and the customer can use the receipt as proof
that the amount owed has been paid.

Please note that there are several different types of invoices, each for different types of services, products,
and payment agreements made between the vendor and his client.

If you are handwriting your receipts, you can speed up the process by investing in carbon copy paper. This
will provide two copies of the receipt: one for the vendor and one for the customer. Also, make sure you
use very dark ink for handwritten receipts.

Make sure each receipt you create, or receive, includes vendor and vendee details, product or service
details, the date of the transaction, the amount of the transaction, the method of payment, and signatures
from the vendor and the client.

If you have to create several different receipts as a part of your business, you can always create a
customized template, or there are several free receipt templates you can download online. Having a
template will speed up the process, and it will ensure all of your receipts look uniform and professional.

Once you get the hang of it, invoices, bills, and receipts will become second nature to you; and they will
help keep your business finances in line and organized.

Related pages
Difference between a quote and an invoice
Invoice example
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