PROCESSPAYMENTDOCUMENTATI ON

Learni
ngOut comes:
LO1.Ent erdat
atosy st
em
LO2.CreatePaymentFacil
i
ty
LO3.VerifyPaymentsagainstDocument
ati
on
LO4.EffectPayments
LO5.Fi
leDocument at
ion

1.Ent
erDat
atoSy
stem
Dat ai sent eredi nt osy stemswi t
houter r
orandwi thint imer equirement sasspeci fi
edi n
r
elevantor gani zat ionpol icyandpr ocedur es
Dat a:Dat ar aw anyf act ,number s,ort extcan bepr ocessed bycomput erand t o give
I
nf or mat i
on.
Today ,or gani zat ionsar eaccumul at i
nggr owi ngamount sofdat aindi ff
er entf ormat sand
differentdat abases.
Dat a Pr ocessi ng፡Dat a pr ocessi ng i s any comput erpr ocess t hatconv er
ts dat ai nto
i
nf ormat i
on.
Thepr ocessi ngi susual l
yassumedt obeaut omat edandr unni ngonaDeskt opcomput eror
per sonal comput er.Becausedat aar emostusef ulwhenwel l-
present ed.
Dat a pr ocessi ng sy stems t ypi call
ymani pulater aw dat ai ntoi nformation,and l ikewise
i
nf ormat i
onsy st em t ypical lytaker awdat aasi nputt opr oducei nformat i
onasout put.
Infor mat ion
Theassoci ationsorr elationshi psamongal lthisdat acanpr ovidei nformation.
Forexampl e.Anal y sisofr et ailpoi ntsal est ransact i
ondat acany i
eldinformat i
ononwhi ch
product sar esel l
ingandwhen.
Typesofdat a
Thinkaboutanycol lecteddat at haty ouhav eRawmat eri
al ofinf ormat i
on.
Forexampl esal es, pur chase, anypay mentandconsi dert heirdi fferentatt
ribut es.
Thesev ar iabl escanbedescr i
bedascat egor i
cal.
Input ,Processi ngandOut put
Whenev eracomput erisusedi tmustwor kitswayt hrought hr eebasi cst agesbef oreany
taskcanbecompl eted.
Thesear ei nput , processi ngandout put.
Acomput erwor kst hrought hesest agesbyr unni ngapr ogram.
Apr ogram i ssetofst epi nstruct i
onswhi cht ellthecomput erexact l
ywhatt odowi t
ht he
i
nputi nor dert opr oducet her equi r
edout put.
Input
Thei nputst ageofcomput ingi sconcer nedwi t
hget t
ingt hedat aneededbyt hepr ogram into
thecomput er .
I
nputdev icesar eusedt odot hi s.
Themostcommonl yusedi nputdev icesar ethemout handkey boar d.
Processi ng
Thepr ogr am cont ai nsinst ruct ionsaboutwhatt odowi t
ht hei nput .
Dur ingt hepr ocessi ngst aget hecomput erfollowst hesei nst ructionsusingt hedat awhi ch
hasj ustbeeni nput .Whatt hecomput erproducesatt heendoft hisst age,t
heout put ,
wi l
lonly
beasgoodast hei nst ruct ionsgi v
eni nthepr ogram.
Out put
The out putst ages ofcomput i
ng ar e concer ned wi t
h gi ving outpr ocessed dat a as
Pr
epar
edByDani
elE1|Page7
 i
nformationinaformthati
susefultotheuser
.
Out putdevi
cesareusedtodothis.Themostcommonl
yusedout
putdev
icesar
ethescr
een,
whichisalsopri
nter
.
Oper
ati
onsmanual
s
Manual sfrom theareaofpay mentt ooper ations
1. Instruct
ionsont hemannerandt heprocedur eforopeni
ngandclosi ngaccounts
2.Inst r
ucti
onsonsubmi tti
ngdataont hei nternalandexter
nal cl
ear
ingoper at
ions.
3.Inst r
ucti
onsont hemannerandt hepr ocedur eforexecuti
ngaccept anceorders
4.Inst r
ucti
ons on submi ssion of the pay ment t o operati
ons dat a by inst
it
uti
ons
responsibl
ef orconducti
ngpay mentoper ati
ons
Organizati
onpol i
cyandpr oceduresmayi nclude:
 Comput ersystem document at
ion
 I nt
ernalcontrolgui
deli
nes
1Da
1. tais al l
ocat ed to cor r
ectsy st ems,account s and r elated systems are
updat
ed
Al locationi st hepr ocessofr equest i
ngaccesst oadat aset.
Ify oual l
ocat eadat asett hatexi st s, thesy stem al l
owsy out oopent hedat aset .
Ify oual locat eadat asett hatdoesnotexi st ,thesy stem cr eat esspacef oritonanav ail
able
dev i
ceandal lowsy out oopent hatspace.
Whenadat aseti sal l
ocat ed, itsr esour cescanbeaccessed, suchasi nputdat a,
ort ext .
Sy st em ofAccount ing
Anaccount i
ngsy st em i sasetofr ecor dsandt hepr ocedur esandequi pmentusedt o
per f
ormt heaccount ingf unct i
ons.
Manual sy stemsconsi stofj our nal sandl edger sonpaper .
Comput erized account i
ng sy stems consi st of account i
ng sof t
ware,comput er fil
es,
comput ers, andr elat edper ipher alequi pmentsuchaspr int
er s.
Somemanualsy st emsev olv edt oi ncl udemul ti
plej our nalsandl edgersf ori ncreased
eff
ici ency .
Thej our nalsi ncludedi nt hesesy stemsi ncl ude:
 As alesj our nalt or ecor dal l credi tsal es
 Ap urchasesj our nalt or ecor dal lcr edi tpur chases
 Acashr ecei pt sjour nal tor ecor dal lcashr ecei pt s
 Ac ashdi sbur sement sj our nal tor ecor dal l cashpay ment s;and
 Ag ener aljour nalt or ecor dadj ust ingandcl osingent r
iesandanyot herent riest hatdo
notf itinoneoft hespeci al jour nal s.
Besi dest hegener alledger ,suchasy st em nor mallyhassubsi di aryledgers( thinksecondar y)
foraccount sr ecei v able,i nv ent or yandaccount spay abl eshowi nghow mucheachcust omer
owes, howmuchofeachi nv ent or ypar twehav eandhowmuchi sowedt oeachsuppl ier.
Thegener all edgershowst het ot alamountofaccount sr ecei v able,i
nvent oryandaccount s
pay abl e,butt hedet ailsint hesubsi diar yl edger sallowcompani est osendbi llst ocust omer s.
Regar dlessoft hesy stem, thef unct i
onsofaccount ant sinclude:
1.Obser ving, i
dent i
fy i
ng, andmeasur ingeconomi cev ents;
2.Recor ding, classi fying, andsummar i
zingmeasur ement s; and
3.Repor tingeconomi cev ent sandi nt er pret i
ngf i
nanci alstat ement s.
Bot hinternal andext ernal user st ellaccount ant st heirinformat ionneeds.
The account i
ng sy stem enabl es a company ’s account ing st af
ft o suppl yr elevant
account ingi nf ormat iont omeett hoseneeds.
Asi nternalandext ernaluser smakedeci sionst hatbecomeeconomi cev ent s,thecy cl
eof
inf ormat i
on, deci sions, andeconomi cev ent sbegi nsagai n.

Pr
epar
edByDani
elE2|Page7
 2Sy
1. stem cont
rol
sar
emai
ntai
nedt
oensur
ethei
ntegr
it
yandsecur
it
yofcl
ient
andpay
eedat
abase
Systemscont rol
,inacommuni cat i
onssy st
em, isthecont r
olandimplementat
ionofasetof
functi
onst hat:
1.Pr eventorel i
mi nat
edegr adationofanypar toft hesy stem,
2.I ni
ti
atei mmedi ateresponset odemandst hatarepl acedont hesystem,
3.Respondt ochangesi nthesy stem tomeetl ongr anger equi
rements,and
4.Mayi ncludev ari
oussubf unctions,suchas
o Co nti
nuouscont rolofcircuitquali
ty,
o Co nti
nuouscont rolofequipmentper f
ormance,
o De velopmentofpr oceduresf ori mmedi ater epair,rest
orat
ion,orrepl
acementof
facil
iti
esandequi pment ,
o Th epr ovi
sionofadv i
ceandassi st
ancei nsyst em use.
#LO2Cr
eat
ePay
mentFaci
li
ty
2.
1 Pay mentf aci
lit
y
 I
spr ocessedaccur at
elyi
naccordancewit
hor gani
zati
onpol i
cyandpr ocedures
 Accountspay ableanditsmanagementiscriti
cal(
necessary)businessprocessthrough
whichanent i
tymanagesi tspay
ableobli
gati
onsef f
ectiv
ely.
 Accountspay ablei stheamountowedbyanent i
tytoi t
sv endors/suppli
ersforthe
goodsandser vicesrecei
ved.
 Thi
sshor t-t
erml iabi
li
tyduetot hesuppli
ers,vendors,andot hersiscalledaccounts
payable.
I
tisi
mpor
tantf
oranybusi
nessbecause:
 Thi
si simpor
tantt
hatstrongcredi
tandlong-t
ermrelat
ionshipwiththev endor
scanbe
maintai
ned.
 Onlywheninvoi
cesarepaidont i
me,vendorswil
lensureuninter
rupt
ed( notbreak)f
low
ofsuppli
esandserv
ices.
 Ag oodaccountspayabl
eprocessensurestherearenooverduecharges,penalt
yorlat
e
f
eest
obepai
dfort
hedues.
 Theor gani
zedaccountspay abl
epr ocessensuresallt
hattheinvoi
cesduearepai
d
proper
ly.
 Thiswill
helpavoi
dmissingpaymentsandmaki ngpaymenttwi
ce.
 I
talsoenablesbusi
nessentit
iestomanagebettercashfl
ows(i.
e.maki
ngpayment
sonl
y
whendue, usi
ngthecredi
tfacil
it
yprovidedbythevendor
,et
c.)
Account
sPay
abl
ePr
ocess
 Everyenti
tywi l
lhaveanaccount spayabledepar
tmentanditsst r
ucturedependsupon
thesizeofthebusiness.
 Accountspay ablesecti
oni ssetupbasedont henumberofv endors&t hev olumeof
thepayment sthatwouldbepr ocessedforaperi
odoft i
me.
 Forexampl e,asmal lenti
tywi thlessnumberofpurchaset
ransactionswouldr equi
rea
basi
caccount spayablepr ocess.
 Wher eas,accountspay abledepar t
mentofmedium/ l
argeenterpr
isewi l
lhaveassetof
pr
ocedurest obefoll
owedbef oremakingthevendorpayments.
Pay
mentpr
ocessi
nvol
ves:
1.Recei
vingthei
nvoi
ce:
 Inthecaseofgoods,
thei
nvoi
cehel
psinshowthenumber
/quant
it
yofgoodsrecei
ved.
 Thet i
mef orwhi
chthebi
lli
svali
dcanalsobeknownwhent hebi
lli
sreceivedon
t
ime.

Pr
epar
edByDani
elE3|Page7
 2.Assesst heinvoicefordetail
s:
 Thev endor ’
sname,aut horizations,dat e,andr equir
ement srai
sedwiththevendor
basedont hepur chaseor dercanbev eri
fiedtoo.
3.Updating(Edit)therecordsfort hei nvoicerecei ved:
o L edgeraccount sconnectedt ot heinv oi
cer eceivedneedt obeupdated.
o He re,anexpenseent ryisusual lyrequi r
edt obemadei nthebooksofaccount
s.
o Incaseswhenaccount i
ngsof twareisused, recordingsomeexpenses.
4.Makingt i
mel ypay ment:
 When t he due dat es ar rive ( based on a mut ual underst
andi
ng with the
vendor /
supplier/
credi
tor)
,thepay ment sneedt obepr ocessed.
 Here,therequi r
eddocument sneedt obepr eparedandv erif
ied.
#LO3 Veri
fyPaymentsagai
nstDocument
ati
on
1Aut
3. hori
zati
onforpay
ments:
 Conf ir
med wi thi nf ormat i
on on pay mentf aci l
i
ty mat chi
ng approved (accepted)
document ation
 I saki ndofanappr oach( way s)whichguar anteesev idencethatthecertai
naccounti s
vali
d?
 I fthecl ientconduct sapay mentbyhi s/ hercar d,thedatamustbet ransmittedtot he
cardhol der’sfinancial establi
shmentf orhandl ng.
i
3.2Discr epanci esar ei dent ifi
edandf ollowedupont ime
 Adi screpancyi sal ackofagr eementorbal ance.
 Ift herei sadi screpancybet weent hemoneyy oupai dandt henumberony our
paycheck, youshoul dcompl ai
ntoy ourboss.
Thedocument shav edi screpanci esnegotiati
ngbankcan:
1.Returnt hedocument st ot heexpor t
erforcor recti
on.
2.Sendt hedocument stot hei ssuingbankonanappr ovalbasi
s.
3.Cable( connect ed)thei ssuingbankf oraut horitytopay .
#LO4EffectPay ments
1 Pa
4. yments:Aremadewi thi
nagreedcreditarr
angementsinaccor
dance
wi
thorganizat
ionpol
i
cy,
procedur
esandlegi
slat
iver
equi
rement
s
Cr
editAgreement :
 Isal egal l
y-binding cont ractdocument i
ng t heter msofal oanagr eement;i tismade
betweenaper sonorpar tyborrowi
ngmoneyandal ender .
 Ispar toft hepr ocessf orsecur i
ngmanydi fferentty pesofl oans,includingmor tgages,
aut
o
l
oans, andot her s.
 Isof tenr equiredbef oretheborr
owercanuset hef undspr ovidedbyt hel
ender .
2 Pa
4. ymenti nst rument s:
 Ar eanessent ial partofpay mentsystems?
 Cr editt r
ansf eri snon- cashpaymenti nstrument s,theuser sofpay mentsy stems
tr
ansf erfundsbet weenaccount satbanksorot herf inanciali
nstit
ut i
ons.
 Howev er,thesei nstrument sshouldbesaf eandef f
icienttomai ntainconfidencein
thecur rencyandpr omot eaneffi
cienteconomy .
Someoft heimpor tantt ypesofdocument susedi naccount i
ngasf ollow:
1.CashMemo:
 Cashmemosser v
eassour cedocument saboutcashsal esandcashpur chases.
 Whengoodsar epur chasedbyabusi nessent er priseoncashbasi st henthef i
rm
r
ecei vescashmemoandwhenabusi nessent erpr i
sesellsgoods,i tgi
vescash
memo.

Pr
epar
edByDani
elE4|Page7
 2. I
nv oice:
 I nv oi ceorbi l
lrecor dst hecr edi tt ransact ionsr el
atedt osal eorpur chase.
 Thi si spr epar edwhenaf irm pur chasesorsel l
sthegoodsoncr edit.
 Whent hegoodsar esol dbyt hebusi nessent erpri
seoncr edit,salesi nv oi cei s
pr epar edi nwhi chal ldetai lsoft hecr edi tsal esv iz.thequant ity
,r ateandt ot al
amountet c.
 Usual l
y ,inv oicesar emadei ndupl icat e,t hemai ncopy( ori
ginal)issentt ot he
pur chaserandanot heri skeptbyt hebusi nessent erpr i
sef orr ecor dandf ut ure
ref er ence.
3. Payi nSl ip:
 Thi sdocumentser vesthepur poseofpr ov i
di ngev idencet hatonpar ticulardat e,a
speci ficamounthasbeendeposi tedi nt hebank.
 Whenadeposi tordeposi t
smoneyi nt hebankaccount ,hef il
l
supaf or m pr ov i
ded
byt hebankcont ainingthei nf ormat ionaboutt hedat e,amountt obedeposi tedand
thenameoft hedeposi toret c.
4. Debi tNot e(A/ Pr ecor dedonDrsi deI nv ent or yonCr )
 Adebi tnot ei sadocumentwhi chshowst hatwhent hebusi nessent erpriser etur ns
somegoodswhi char edef ect i
v ei nnat ureornotasperspeci fi
cat i
ons.
 I nt hisdocument ,alldet ail
saboutt hedat eandamountoft r
ansact i
on, thent hepar ty
whoseaccounti sdebi tedal ongwi t hr easonf ordebi t
inghi saccountar ement ioned.
5. Credi tNot e(A/ Rr ecor dedonCrsi deSal eRet urnonDr )
 Acr edi tnot ei sadocumentwhi chshowst hatt hebusi nessent er
prisehasgi v en
thecr edi ttot hepar tytowhom t hisdocumenti ssenti nr espectofanybusi ness
transact ionwhenabusi nessent er priser ecei vesbackt hegoodssol dear liert heni t
makesacr editnot einf avoroft hepur chasershowi ngt hathi saccounthasbeen
credi t edi nt hebooksofbusi nessent erpr ise.
6. Voucher s:
 Thedocument spr epar edf ort hepur poseofr ecordingbusi nesst ransact ionsi n
thebooksofaccount s.
 Voucheri spr epar edont hebasi sofsour cedocument s.
 Forr ecor dingbusi nesst ransact ionsi nt hebooksofaccount s, sour cedocument sar e
furtheranal yzedandconcl usi
onwhi chaccounti st obedebi tedandwhi chaccounti s
t
obecr edi ted.
Feat ur esofVoucher :
- I tisadocument .
- I tispr epar edbyanal yzingt hesour cedocument s.
- I tcont ainsdeci sionr egar di
ngt heaccount st obedebi tedandcr edit
ed.
- I thel psi nr ecor dinganaccount ingent r yint hebooksofaccount s.
Twot ypesAccount ingVoucher s:
I. CashVoucher
II.NonCashVoucher .
I,CashVoucher s:
CashVoucher sar ev oucher st hatar epr epar edatt hetimeofr ecei ptorpay mentof
cash.
Italsoi ncludesr ecei ptandpay mentt hr oughcheque.
CashVoucher sar eoft wot ypes:
- Cr edi tVoucher sand
- Debi tVoucher s.
I.
1Debi tVoucher s:
- Cashmayber ecei v
edwhen:
Pr
epar
edByDani
elE5|Page7
 - Goodsar esol doncash
- Sal eofasset soncashet c.
#Cont entofDebi tVoucher s:
Nameandaddr essofent i
ty
Dat eofPr epar ingVoucher
Account ingVoucherNumber
Ti tl
eofAccount i
ngCr edi ted
Netamountoft ransact ion.
Nar ration( abr iefdescr iptionaboutt het ransact i
on) .
Si gnat ureoft heper sonwhohaspr epar edt hev oucher .
Si gnat ureofaut horized
I.2Cr edi tVoucher s:
Cr editVoucher sar ev oucher sthatar eprepar edwhenpay menti smade.
Pay mentmaybe on accountofexpenses,pur chases on cash,pay mentto
credi toret c.
#Cont ent sofCr edi tVoucher :
1. Nameandadder soft heent ity
2. Dat eofPr epar ingVoucher .
3. Account ingVoucherNumber .
4. Titl
eoft heAccountDebi ted.
5. NetTr ansact ionAmount .
6. Nar ration( i
.e.,abr i
efdescr i
pt i
onoft het ransact ion).
7. Signat ureoft heper sonwhopr eparedi t.
8. Signat ureoft heaut hor i
zedsi gnat ureoft heor ganization.
9. Suppor tingv ouchernumber .
IINon- CashVoucher s:
Non- cashVoucher sar ev oucher spr epar edf ort het r
ansit
ionsthatdonoti
nvol
vein
floworoutf lowofcash.
Forexampl e,Debi tNot eCr edi tNot e, etc.Thesear eprepareswhentr
ansi
ti
onssuch
ascr editsal es, credi tpur chaseet c.aret ober ecor ded.
#Cont ent sofNon- CashVoucher s:
1. Nameandaddr essofent i
ty.
2. Dat eofPr epar ingVoucher
3. Account i
ngVoucherno.
4. Titl
eofAccountdebi ted/ Credi ted
5. NetTr ansact ionAmount
6. Signat ur eofper sonpr epar i
ngi t.
7. Signat ur eofaut horizedsi gnat ure.
8. Nar ration(i.
e.br i
efdescr i
ptionaboutt het ransact i
on)
#5.Fi
leDocument
ati
on
5.
1Document ation
 I
sf i
l
edont i
mei naccordancewithorganizati
onpolicyandprocedur es.
 Maintainingasy st
em ofor gani
zed,accur ateandconsistentdocument at
ioni
n
thewor kplaceisbot hnecessar
yandbenef i
cial
.
 Makingdocument ati
onapr i
ori
ty,especiall
ywheni tcomest ot hecompany ’
s
managmentdepar t
ment ,
off
erresources when t heyare needed and answer
i
mpor tantquest i
onsaboutt hecompany .
 Document ati
onreferstoasetofr ecor
dst hatexisonpaperorhar ddr i
ves.
 I
tismat eri
althatprovi
desev i
denceorinformationtoserveasar ecor d.
Pr
epar
edByDani
elE6|Page7
  I nt he wor kplace,document ati
on isr et
ained recor ds ofempl oy mentand
companyact i
onsandev entsasr equiredbyl egalmandat esandcompany
pol icy.
2L
5. ocat ionoff il
eddocument ationi seasi lyaccessi bl eandt raceabl e
 Fi li
ngmeanskeepi ngdocument si nasafepl aceandbei ngabletof i
ndt hem easi
l
y
andqui ckl
y.
 Af ilingsy stem i
st hecentr
alrecord-keepingsy stem foranor gani
zation.
 I thel psy out obeor gani
zed,systemat i
c,effi
cientandt ransparent
.
 I tal sohel psallpeoplewhoshoul dbeabl et oaccessi nfor mati
ontodosoeasi l
y.
 I tisal way sapl easurewhensomeonel ooksf orsomet hi
ngandi sabl etofindit
wit houtdi ff
icul
ties.
 Wer eceiveandsendoutdocument sondi fferentsubjects.
 Weneedt okeept hesedocument sforfuturereference.
 Ev er yonewhoneedst ousedocument sshoul dknowwher etogetthem.
 I
mpor tantt hi
ngst oknowaboutf i
li
ng
 Whatdowef
il
e?
 Wef il
edocument sthataresentt ousbyot herpeopleoror ganizati
ons.
 Weal sofil
er ecordsofallouror gani
zati
onalacti
v i
ti
es.
 Thesecanbel et
ter
s,memos, r
epor t
s,fi
nancialr
ecords,policydocuments,etc.
 Whendowef i
le?
 I nv eryorganizati
onsfil
ingisdoneatl easteveryday .
 Inasmal lof fi
ceyoucoul dfi
leonceort wiceaweek.
 Equipmentusedf orfi
li
ng
 Fil
ingCabi net -I
tisusedtokeepf latfil
esandhangi ngfil
es
 Dat eStamp-I ti
susedt odat estampdocument st
hatar ereceivedondailybasisso
thatt heyar ef il
edi nchronologicalorderandsowehav ear ecor
dofwhenwe
received thedocumentRegi ster- Itisused t orecordf i
lest aken outand fil
es
returned
 Fil
ingshel ves-Itisusedtof i
leboxf il
es

Pr
epar
edByDani
elE7|Page7
 Test2(
20%)
1.Assesst heinvoiceThev endor
’sauthori
zat
ionsandr equi
rementsraisedwiththev
endor
basedonthepurchaseordercanbev eri
fi
ed.
2.Updati
ngLedgeraccountsconnect edtot
heinvoicerecei
vedneedtobeupdat ed.
3.Makingtimel
ypay mentWhent heduedatesar r
ivebasedonamut ualunderst
andi
ngwi
ththe
vendor
.
4.Authorizati
onf orpayment sConf i
rmedwithinfor
mat i
ononpayment .
5.Pay
mentsismadewi
thi
nagr
eedcr
edi
tar
rangement
sinaccor
dancewi
th
or
gani
zat
ionpol
i
cy.
6.Credi
tAgreementisal egal
ly-
bindi
ngcont ractdocument i
ngbetweenbor rowerandlender
.
7.CashMemo.i tserveassourcedocumentsaboutcashsalesandcashpurchases.
8.I
nv oi
ce:i
tserveassour
cedocument saboutcredi
ttr
ansacti
onssal
eorpurchase.
9.Payi nSl
ip:anevi
dencethatonpart
icul
ardate,aspecif
icamounthasbeendeposit
edint
hebank.
10.DebitNoteisadocumentwhichshowst hatwhent hebusi
nessenter
pri
seretur
nssomegoods.

Pr
epar
edByDani
elE8|Page7