Fiscally Ready Communities Best Practices
Receipting Policy Guide

Fiscally Ready Communities supplements the local government’s process of establishing Receipting Policies. Having a detailed receipting policy ensures that a local unit can accurately account for all existing cash and follow the money trail.

Fiscally Ready Communities

The local unit should have the following policies set in place:

• There must be a record of each individual cash transaction.
• Receipt books issued to other departments must be accounted for numerically.
• The use of generic or “dime store” receipts is strictly prohibited.
• The method of payment must be indicated on the receipt (cash, check, or credit card).
• The receipt should include the following 10 requirements:
  1. The date of the transaction.
  2. The dollar amount received.
  3. The type of payment (cash, check, credit cards, etc.).
  4. The purpose (garbage, labels, taxes, parcel number, etc.).
  5. The payer.
  6. The department receiving the cash.
  7. The person accepting the cash.
  8. The receipt number if applicable.
  9. Invoice number if applicable.
  10. The account number the cash is being deposited into.
• The receipt must allow for accurate revenue account classification in conformity with the Uniform Chart of Accounts.
• Checks must be restrictively endorsed (stamped for deposit only) at the point and time of collection.
• Bank signature cards should be kept current and the authorized signers limited (Department of Treasury, 2007).
• When cash is collected, the following policies shall be used:
  • Formal evidence must be created for each collection (such as sequentially numbered cash receipt ticket, cash register receipt, etc.) and provided to payors where applicable.
  • The system must include controls to ensure that every receipt is to be included in the cash receipts journal. This includes the 10 receipt requirements noted above.
    • As general guidance, the cash receipts journal is maintained by the treasurer.
    • Each receipt is posted to the receipt journal in numerical order to the proper bank account, fund, and revenue account.
    • In a manual system, monthly totals by fund are posted from this journal to the general ledger revenue control account, which is the responsibility of the clerk.
  • Each bank deposit (evidenced by a bank deposit slip or other documentation) must be in agreement with the cash receipts and the deposit slip (or other bank deposit support). Total currency collected must be in agreement between these two sources.
  • Deposits are required to be deposited in a reasonable timeframe (daily) (Department of Treasury, 2007).
    • In instances where the amount of cash on hand is minimal, deposits may be made less frequently (weekly).
    • Undeposited funds should be secured in a locked place such as a safe or vault.
  • Money to be deposited should be counted and reconciled to the summary of cash collections to be sent to the accountant or bookkeeper.
    • If there is a difference, a “cash overage/shortage” account should be used.
    • Never make up the difference from cash in the change drawer.
  • The change drawer should never be used to cash personal checks.
  • The treasurer must provide the accountant or bookkeeper a record of all money received and the purpose of the amounts received (such as the budgeted revenue account or the receivable account).
    • This may be done in summary form (example: department transmittal advices) or by individual receipt.
  • The treasurer is responsible for all cash receipts, unless the authority has been delegated to another official in a home rule city or village.
    • If any employees other than the treasurer (or delegated official) of the local unit receive cash, they must do so with the approval of the treasurer and in accordance with all cash handling policies.
• All financial institutions used as depositories, must be approved by the governing body (Department of Treasury, 2007).

Receipting Policy Guide Review Table

Please use the table below to consider whether your receipting guide policy needs an overhaul or refresh. This document has been built so you can track where you are in the process.