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Cash Controls

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12. Cash on delivery sales (COD’s)

The COD sales area is a high risk integral part of our business. The COD account must only be used for pure COD business – it is stating the obvious but if a customer has an arrangement to settle their account via a means other than cash against delivery then they must not be treated as a COD customer. This means that any customer that may settle at the end of the week or every Monday i.e. any 7 day or similarly named accounts, may not be accounted for as COD business. These are account customers and as such must be accounted for as such – they must be set up in your debtor’s ledger as a separate stand alone account with the appropriate credit terms i.e. 7 days, 10 days etc.

This cycle has a number of unique characteristics and in order to mitigate the risks of misappropriations of funds; personnel must adhere to the following procedures:

The major activities of COD sales can be broken down as follows:

• Invoicing and despatch

• Receiving, recording sales and payment

• COD reconciliations

• COD and cash refunds

• COD supervisory controls

Invoicing and dispatch

• No stock items must leave the store without being invoiced out and checked by security or designated dispatch personnel.

• The correct name, delivery address and amount owed by client must be documented/printed on the invoice.

• Drivers must enter client details and amounts received from C.O.D clients in the C.O.D column provided on their respective trip sheets.

• The client accepting the goods must sign the invoice in full and driver’s tripsheets to acknowledge payment and the receipt of goods.

• All cheques received must be restrictively crossed as they are received, as this makes it more difficult to “cash” the cheques should they be stolen.

• All cash and cheques received by driver must be entered into a receipt book and handed to the COD clerk.

• COD clerk must sign driver receipt books when monies are received.

Receiving and recording sales and payment

• Administration clerk must immediately query, when long outstanding invoices are presented for payment, at the time when he/she matches receipts and credit notes to invoices, on the system.

• The incorrect matching of receipts with invoices (and indeed credit notes) is expressly forbidden and will be construed as tantamount to a fraudulent practice.

• Branch managers must make 100% certain that staff members are under no illusion as to the serious implications that will arise from infringements in this area.

• Separation of responsibility should be exercised, whereby a senior official, (not the same person receiving COD’s), must query outstanding C.O.D’s older than forty eight hours (48 hours).

• Branch administrator must ensure that Daily Summary Sheets are accurate (agreed to system receipt reports) and timely banked (no later than the following morning) and authorised by him/her and the branch manager.

COD reconciliations

• Each branch must reconcile the daily closing balance on all COD accounts and not just record the daily movement on the accounts-this task is in itself a standard daily requirement but does not in itself constitute reconciliation.

• The reconciliation must show the individual items that make up the days closing balance on the COD accounts.i.e. a full list of all outstanding items, whether they are debits or credits that comprise the balance.

• All individual items listed should be identified with full explanation for overdue amounts in theory, any unrecovered amounts older than 24 or 48 hours, at the most, are overdue.

• If there are differences between the total of your list and the debtor’s ledger balance then this difference must be clearly identified.

• It



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