Functions of Cash Management Account into the company

The treasury accountant, bank accountant and cash management according to the size and activity of the company are considered one of the most important roles in any finance department in companies because they are responsible for cash balances, whether the company's bank accounts of various types of current accounts or loans accounts and facility and deposits accounts and the most important duties are:

1- Following-up bank accounts, provide a statement of daily balances, checks under collection, issued checks that have not been paid yet, payments netting for the company and receipts and analyze them monthly and review cash on hand transaction daily and the rest of the subsidiary treasury and related to receipt vouchers and cheque payment voucher.

2- Following- up the notes receivable issued to the company and the notes payable on the company and follow up their due dates.

3- Preparing reconciliations for all bank accounts, whether current accounts or loans and facility monthly, knowing the reasons for the differences and preparing journal entries for the bank reconciliation.

4- Preparing the documents required to request for bank credit, following up on the credit activation after issuance and reviewing its balances (for letters of credit & letters of guarantee/ loans).

5- Following-up long-term loan balances, debit interest, loan repayment installments, bank account reconciliations, and preparation of accounting journal entries for loans and accrued interest.

6- Following-up of bank deposits in the various banks that the company deals with, follow-up notifications of linkage and maturity, match accrued interest with banks, and prepare accounting journal entries for deposits.

7- Following-up the overdraft facility accounts, the accrued interest, the commissions of the highest debit balance, and recording the journal entries related to these processes.

8- Following-up, controlling and reviewing of bank charges and commissions and their conformity with the contracts concluded, analysis them and reporting to the direct manager.

9- Issuing the required letters of guarantee in accordance with the contract with the beneficiary.

10- Preparing the bid bond for entering tenders and returning them after awarding, preparing the performance bond after awarding according to the stipulated of the contract, issuing it and delivering it to the customer, and returning it after the expiry date or ‎termination of supply or after the warranty period. And preparing the advance payment guarantee according to the stipulated of the contract, issuing, reviewing, delivering and returning it after the termination of supply period or decrease what was supplied.

11- Preparing letters of credit opening documents such as (requesting the opening from the company including the conditions, payment method, shipping documents and requesting the opening from the bank), reviewing the letters of credit after issuing them from the bank and sending them to the overseas suppliers and making adjustments to the letters of credit after addressing the overseas suppliers such as (extending the shipment period or allowing to breaking bulk) and reviewing the shipping documents received from overseas according to the contract stipulated.

12- Following-up of payments from the value of external letters of credit according to the contract, follow-up on the value of the remaining, and follow-up balances of letters of credit with banks until the letters of credit expiry date.

13- Reviewing the open letters of credit for the company according to the terms of the contract with the customer and preparing the shipping documents, which are (commercial invoice& certificate of origin& bill of lading& packing list& insurance certificate& shipping guarantee& certificate of compliance& proforma invoice) according to the contract stipulated.

A Bank Accountant and Bank Reports

Cash Management in the company must submit daily to the financial manager Cash Summary Report in the main treasury and subsidiary treasury and in the bank current accounts and loans accounts and facility and deposits as well as accounts payable during the next period and how they are covered and paid, and the report must be very accurate and reflects the current liquidity position of the company in a way that enables the financial manager and senior management to make decisions based on the report and good accounting software to produce the required reports and also can be prepared using Excel and these reports are current accounts and loan accounts and facility which are as follows

1- Bank Account Balance Report on today's date for each bank account, whether a current account, a deposit account, or a loan account and facility.

2- Available Balance Report on today's date (current accounts after deduction of notes payable during the next period) and the available balance in the facility account that the company can use.

3- Outstanding installment loans balances on the company during the next period and the accrued bank interest rate on the company.

4- Notes receivable (checks received from customers) and notes payable (accounts payable checks to vendors) by the checks amount, their due dates, and the drawee bank.

Bank Current Accounts 

Any company must have bank current accounts through which cash collected from sales and customers is deposited and , payment is made to suppliers by checks through them along with the company's own withdrawals and the size of the current accounts of each company varies according to the size of each company and the size of its activity and the amount of cash inflows and outflows and a general ledger account is opened in the chart of accounts for bank current accounts, for example, No. 1520, and sub ledger account for each bank current account, for example 15201 bank current account- National Bank of Egypt, 15202 bank current account- Banque Misr, and 15203 bank current account- Banque du Caire, and so on.

Dealing with any process or document is done with an accounting journal entry, for example

1- When receiving checks from the customer, they are due after a month in the beginning, an account must be opened in the chart of accounts, which is the notes receivable account (checks received from customers).

A journal entry is recorded: 

DR. Notes Receivable

To the customer's account **** and the explanation is given in the journal entry (check number, customer's name, drawee bank and due date)

This journal entry means that we have in the treasury of checks (a check for *******) and of course every check received from the customer is the same journal entry is prepared and the total balance of notes receivable in the trial balance must be in return for checks with the treasurer and a cash count is prepared on the form periodic, the bank accountant creates a sub-sheet in Excel for the notes receivable next to the accounting software report, in which the check owner name (customer name), the check number, the drawee bank and the value of the amount are recorded in order to follow up on the dates of the checks’ entitlement and arranged them with customers at times

2- When the check is due and it is sent with a bank representative to collect it and prepare checks portfolio for each bank and the check can be collected on the same day if it is drawn on the same bank meaning that if the check is on National Bank of Egypt and it will be deposited into the company’s account in National Bank of Egypt then in this case it is it is collected at the same time, but if the check is drawn on a bank other than the bank of the company, meaning that the check clearing, in this case the check is collected after 3 days, and when the check is sent with the bank representative and he leaves the treasury of the company and the journal entry is as follows

There are some companies in which the volume of dealing is large and deals with more than one bank and more than one representative, a petty cash account is opened for each bank representative by the value of checks that are delivered to them and when he collects them whether in cash or a check the petty cash account is closed and this is done daily and the journal entry is as follows

The idea is that the number and amount of checks are known to each representative, and this is when there is a large daily transaction volume of checks.

3- When the check is collected from the customer and the accountant receives the original deposit ‎stamped from the bank, or it appears in the bank account statement that the check has been collected; the journal entry is as follows

Or in the case that the check was paid and deposited in the company treasury then in this case the journal entry is as follows

The petty cash of the representative is closed entry 

4- There are some transactions that occur between the main treasury of the company and the banks, meaning that a check is paid from the bank to finance the treasury and the representative is given the check to pay it from the bank, in this case it is preferred that there be a clearing account and let it be the employee’s petty cash and the journal entry is as follows 

When the check is paid from the bank, the journal entry is as follows: 

 When depositing the amount in the company’s treasury, the journal entry is as follows:

There are some who clearing the remittance account instead of 

DR. Petty Cash- Bank Representative 

And this is in case there is only one bank representative, but in the case of more than one bank representative into the company and tightening control over the treasury transaction and the bank prefers that the transactions be recorded to the petty cash account and in the case of paying amounts from the treasury and depositing it in the bank

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The journal entry is as follows:

And when depositing the amount in the bank, the journal entry is as follows:

And of course, any bank representative before receiving a check or cash must sign the copy of the check and receipt and at the end of the process he will receive the copy which he signed

5- When there are transfers between the company's current accounts and let it be a transfer from National Bank of Egypt to Banque du Caire by an amount one million Egyptian pounds, for example, and the transfer will be through a transfer voucher, so the journal entry is as follows

6- An account is opened in the chart of accounts and it is the notes payable account and this account is a clearing account before any payment from the company's current account, for example, when the company issues a check in respect of the supplier, for example, with a value of 300,000 Egyptian pounds, and this check its due date after a month, for example, the journal entry is

 When the due date of the check comes and the supplier pays it from the bank and the bank account statement shows that it has been paid, the accounting journal entry is 

And the benefit of notes payable account is that it is a clearing account so that there is no effect on the bank account when issuing a check to the supplier, but the value of the check is deducted from the bank account when the supplier pays the check on its due date

The checks are not for suppliers or creditors only, but there can be a check payment for petty cash of the purchasing representative and the journal entry is as follows

When the check is paid from the bank, the journal entry is as follows

7-The bank accountant must review the bank charges and commissions that are deducted from the company's current account and must review their value according to the contract with the bank and the bank charges are those expenses and costs that the company charges in return for the service provided by banks such as transfers between accounts between the same branch or other branches of other banks and collect checks clearing, etc.

Accounting treatment of bank charges is

And all of these accounting transactions and treatments that exist in practical reality, which the bank accountant should have flexibility and understanding of all these processes