The preceding control systems were all designed primarily for the receipt of payments made by check. But what if the primary form of payment is cash? Unlike checks, cash is completely untraceable, and so is the preferred asset to steal. Thus, cash handling calls for tighter physical controls. The essen­tial cash receipts process flow is for the initial cash receipt to be stored in a cash register, which is reconciled at the end of each shift; cash is removed at the end of each shift for deposit, after which the bank’s validated deposit slip is reconciled to the company’s original deposit slip. The basic controls are shown in Exhibit 6.10.

The controls noted in the flowchart are described at greater length next, in sequence from the top of the flowchart to the bottom.

• Enter cash in cash register. The primary role of the cash register is to record the amount of cash stored in it, either electronically or on a paper tape, while also providing a moderate level of security over the cash. If there is no cash register, as may be the case in very low-volume cash-handling situations, at least use prenumbered receipts to record the cash.
• Give copy of receipt to customer. When using a cash register, there is a risk that the cash register operator will remove cash and punch in a re­duced cash receipt. To reduce this risk, always require cash register op­erators to give a copy of the receipt to the customer, since customers may review their receipts to ensure that the correct amount of cash was received. As an added inducement, many retail operations offer a free purchase to customers who do not receive a receipt.
• Reconcile cash to cash receipts. At the end of a cash handler’s shift, a different person with no responsibility for cash handling should recon­cile the cash in the cash register to the total of cash received as recorded on the register. Once completed, the person completing the reconcilia­tion should sign and date it, so there is a record that a reconciliation in­deed took place.
• Transport cash in locked container. To reduce the risk of unauthorized access to any cash being transported for deposit, always store it in a locked cash pouch. The most elaborate extension of this concept is to hire an armored truck to transport the cash, which is mandatory for larger quantities of cash.

Exhibit 6.10 System of Controls for Cash Handling

• Reconcile deposit ticket to validated deposit slip. Once deposited, the bank will issue a validated receipt for the cash. Someone other than the person who made the deposit should compare the original deposit ticket to the validated receipt and investigate any differences. This control is needed to ensure that the person making the deposit does not remove cash during delivery to the bank.

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Tags: basic cash, basic receipt, cash receipt