When a business receives any cheques it is good practice to bank them as soon as possible. Not to do, so runs the risk that the cheque might be lost or forgotten about and it also means that the money is not available for use by the business as quickly as it could be.
It is a similar situation with cash. Although many businesses may hold cash for use in their day to day businesses, large amounts are a security risk and as such most businesses will ensure that any excess amounts (i.e. amounts over a chosen limit) is banked as soon as possible.
In the previous section we saw that a cheque can be banked either by taking it to a bank branch or by using a computer app and a photo or image of the cheque. For obvious reasons, this second option is not available for cash which must be taken to a bank branch.
When a cheque is received you should check that it has been completed correctly before it is submitted to the bank.
- That the name of the business is recorded correctly as the “payee”
- That the date has entered and that it is not post-dated (in which case it cannot be submitted to the bank until that date) and that it is not more than six months old (a common problem at the start of a new year when people might record the previous year by mistake).
- That the amount written in words agrees to the amount written in figures
- That the cheque has been signed
If information has been recorded incorrectly, or if the cheque is unsigned, the payer will have to be informed so that the problem can be resolved.
Taking cash and cheques to the bank
When a business takes cash and/or cheques to a bank branch it will prepare a paying-in slip. These are forms given to business by its bank which record information about the money paid into a bank account and also identifies the bank account the money is to be paid into. Paying-in slips for businesses typically include two copies of each slip that are completed simultaneously through the use of carbonated paper.
An example of both sides of a typical paying-in slip is given below. When the cheques and cash are presented to the bank, the bank teller will check that the cash and cheques received agree to the paying-in slip. The bank will then retain one copy of the paying-in slip, the other will be stamped and initialed by the bank teller and handed back for the business’ records.