PROCESS DEPARTMENT INPUT OUTPUT ACCOUNTING

RECORD

Preparation of Mailroom Reception of mails None None

remittance advice employee/clerk. containing
information about
the payment of
customer.

Record and Cashier from Cash Obtaining and Prepare journal Cash receipts
deposit checks receipt processing checks voucher to be journal
department delivered by remitted to GL
Mailroom department.
Department.

Record and update Accounts Process Prepares summary Accounts

corresponding receivable Remittance of changes in Receivable
accounts department (AR advices obtained account balances subsidiary
receivable clerk) from Mailroom
department.

Update general General Ledger Obtain and Posting of Cash and accounts
ledger accounts department (GL process journal accounts to the receivable
clerk) voucher from CR general ledger accounts.
Department and
summary from AR
department.

Reconciliation of Controller's Office Account None (provide None

cash receipts and summaries, assurance to
deposits journal vouchers, accounts)
bank statements,
general ledger,
deposit slips
(performance of
bank
reconciliations)

Physical controls:

1. For the Mailroom Department, it may be performed by one person only because the only task therein
is that to segregate content of the mails which are the remittance advice and checks to be delivered to
Accounts receivable and cash receipts department. It should be monitored by an employee of the
controller to ensure that all of the checks and advices are duly received and delivered.

2. For the Cash receipt department, they should not be an employee of the account receivable
department as well because they might manipulate the collections since they are also in charge of
remitting the proceeds to the bank. This department shpuld be monitored thoroughly by the
management (controller in this case).

3. For the accounts receivable department, it is the same with the cash receipt department.

4. For the general ledger department, lt should also be separate to CR and AR department. The
controller should check that the appropriate amounts are recorded and duly classified.

5. Thr controller isl in charge for overall internal control and audit for cash receipts by making bank
reconciliations and monitoring.