System of Internal Check as Regards to Cash Sales.
Internal check as regards Cash Sales in a big business house, where a large number of daily cash transactions. There many chances of frauds and irregularities if there is no good system of internal check. There may be three types of cash sales-
- Sales at counter,
- Sales by traveling agents, and
- Sales by Post.
Cash Sales at counter:
The internal check system should consist of the following elements:
Every salesman in charge of making sales should be allotted a number or a specific name.
Cash sale invoices or cash memos should be pre numbered and be of different colours for different departments,
The salesman at each counter should prepare pre numbered cash memos in triplicate,
Two copies are handed over to the customer who carries them n to the cashier. Cashier receives the cash and stamps them cash paid. He returns one copy to the customer and the other copy is retained by the cashier. The goods sold are then handed over to the customer either by the cashier or by the salesman.
If goods are handed over to the customer by the gate keeper, four copies are required to be made by salesman. In such cases, one copy is retained by the gate keeper.
At the end of day, salesman’s summary which reveals quantity and value of the goods sold should be tallied with cash sales summary prepared by the cashier and the gatekeeper’s summary which reveals the goods delivered during the day.
If any discrepancy is found, that can be removed the same day or the next day.
Daily cash receipts should be deposited in a bank on the same day and statement of cash sales of the day or cash sales summary should be sent to the accounts department.
In some organizations, cash recording machines are used. In such cases, the total of cash received as shown by the machine, should be checked with the amount actually banked.
In some departmental stores, bar code stickers are struck on all products. The customer chooses the goods displayed and takes them to the cashier. A computerized title reads the bar code, and records the price automatically. The entry for the transaction also updates stock records. Cash collected can, thus, be easily reconciled with completely accurate sales figures.
Cash Sales by Traveling Agents:
In some business houses, traveling agents are appointed to make sale. In such a case, internal check system may be as follows-
The agents authorized to sell goods for cash should issue a temporary receipt for the cash received and the customer should be instructed to get the receipt from the head office.
The head office/branch office shall issue and mail a confirmed receipt to the customer within a stipulated period. If the customer does not receive the receipt within that period, he should enquire for the same from the head office.
The agent should be instructed to remit the cash collected daily or periodically or deposit it into the bank account of as per instructions of the head office without any deduction for salary or commission payable to him.
The head office should send the statement of accounts regularly to each individual customer to keep him informed about the amount due to him.
The agent should also send. Account sales giving full details of sales made, cash collected and send and expenses incurred to the head office.
The agent should be transferred from one area to another without any prior information to him. This will help avoiding trends or their collusion with customers and increase their efficiency.
Postal Sales:
In business houses where goods are sold by post, the system of internal check shall be-
A separate sales register should be maintained for recording sales made by post or VPP.
Cash received and goods retained on this account should also be entered in this register.
A responsible officer should be deputed to check carefully the VPP register and the goods for which cash has not been received should be especially audited.
In this connection cash received should be checked carefully from cash book.
Orders received should be filed date wise and in serial order.
