Cash Receipts Book Query

GotBainne?

Hi,

I am currently getting me records in order for my year end accounts and I have a query. In my Cash Receipts book I record the payments I receive from my clients. In this book I have a column where I reference the invoice that the payment was related to.

My question is in what book do I record the lodging of my client's cheque into my business account. Or do I need to to record this transaction?

Thank you.

anonanon

Hi you will need to do the double entry into your ledger accounts
You will need to 1) credit your Bank Account
2) debit your Debtors Account

monariek

anonanon - crediting your bank account in the ledger is for recording payment out, not receipts inwards. you should probably not be giving out advice on an accountancy forum if you dont know that


gotbainne - you can maintain a cash lodgements book if you so wish, but as far as posting to the ledger your entries are:


1. record the sales invoiced in the year
Dr debtors (based on your invoice numbers recorded as issued)
Cr sales/revenue/income

2. record the cash received

Dr Bank (bank lodgements from the cash lodgements book mentioned above)
Cr Debtors (invoiced settled in the year by customers)

anonanon

sorry i got it wrong.. I mixed up my debits and credits

Herbalist

If you use an accounts package for this it can make it a lot easier as you use the software through modules which link up in the background. (I am linked to Tas / Sage and would recommend the Free Tas Basics).

You can create your customer, then record the amount owing onto the customers account filling in the invoice number in the reference field, and filling in the amount, vat amount (if any) and a description.

In the bank section you can create your bank account. You can then enter a customer reciept. When you choose the customer the system will show you what their outstanding balance is and what invoices they owe you for. You can enter your payment filling in the cheque number or online payment ref number in the reference field, the amount and the date. You can then allocate this payment against the customers account in general or you can allocate it against specific invoices on the customers account. This will update both your bank balance (increasing it) and the customers outstanding balance (decreasing it).

Like I said the free Tas software will do this but so will the majority of entry level accounts packages as its standard functionality. Using a software package can make it a bit easier than having four seperate ledger books or spreadsheets and trying to work out the double entry and the debits and credits.

GotBainne?

Thank you everyone for your replies. They have been very helpful.