Cash Crash: Repairing a Damaged Cash Entry 

Product: WinTam Series 6 and TAM Series 7

There are times when a customer related cash receipt or disbursement will hit the customer side but not the General Ledger side, or vice versa. This document explains the proper procedure for correcting these problems.

Note: When the customer side is referred to, it can also apply to the Broker or Lienholder involved, if any.

This document is divided into the following sections:

Determine the Problem 

Immediately following an error, lockup, loss of power, or error when running the Trial Balance report, run a Validate Accounts Receivables Report (located under Accounting, Month-End, Month-End In-Balance Checks, Accounts Receivable ). An error will appear on the report if there is a "cash crash." Check the following:

  1. Did it hit the Customer? Check the customer accounts that were involved to see if the check (RET or ADV ) or deposit (PAY ) appears. If you see the RET, ADV or PAY here, then it hit the customer side.

Note: Do not rely on the customer detail screen that shows the last few transactions entered. You must view Transaction History Balance Forward and Open Item and look for the transaction on these lists.

  1. Did it hit the GL? Run a Status of Accounts for the cash account involved to see if the check/deposit appears. If the receipt or disbursement appears on the status, then it hit the GL. Also run a trial balance sheet to make sure that all the entries for that month are in balance.

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Correct the Damaged Entry 

You may want to attach an accounting note to the correcting entry to explain why this was done, or note the reason in the entry description. Run a Validate Accounts Receivables Report (located under Accounting, Month-End, Month-End In-Balance Checks, Accounts Receivable ) after fixing the damaged entry to ensure that the Year to Date is in balance.

Note : Errors may still appear on the report after the balance correcting entry is made. The problem has been corrected if the current period and year to date are both in balance.

When a Deposit has hit the Customer but not the GL 

Enter a Journal Entry to DEBIT the cash account and CREDIT your Accounts Receivable account for the amount that hit the customer side but not the GL.

Note: If the entry included PAYs that affected more than one customer, the journal entry can be for the total of all PAYs, or you can enter a separate journal entry for each PAY.

When a check (RET, ADV) has hit the customer side but not the GL 

Enter a Journal Entry to CREDIT the cash account and DEBIT the accounts receivable account.

When a check has hit the GL side but not the customer side 

Enter a Journal Entry to DEBIT the cash account and CREDIT the accounts receivable account. This will reverse the check on the GL side without affecting the customer side. Now re-enter the disbursement as normal.

Note: For the rest of the current accounting month, errors will display on the Validate Accounts Receivables report for each client who was involved with the cash crash. There will also be an error listing the correcting journal entry. This is normal and the error listing will clear when you close the current accounting month.

The error will look similar to those listed below:

  1. Current period receivables for Invoices and General Ledger are different.

 The report period difference is=$ the amount of your out of balance

  1. Corresponding invoice reference # not found in cash receipt and disbursements. 
Record # Key Pol_idx Trans A B D State Prt Month Refer Doctype Journal Amount Balance
47499 C ABBOJO1 PAY 1 1 1 c N 0001 2 D 1 $500.00 $500.00

Or

  1. Corresponding invoice reference # not found in customer invoices. 
Record # Journal Doctype Refer A B D Account Date Desc Debit Credit Month
67174 10 D 1231 1 1 1 110 01/12/00 Correct Dep #21 500.00    0001

When an entry that did not affect the customer ("Other" Type Receipt) 

If there are entries in the cash receipt or disbursement that were not affecting client accounts, they may also need to be dealt with. If, after running a Status of Accounts, you determine that the receipt or disbursement did not hit the GL, you should run a Trial Balance sheet to make sure that there are no out of balance entries in the system.  Then you should re-enter any items not affecting client accounts as normal receipts or disbursements, or include them as separate lines on the correcting journal entry.

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Validate Cash 

Follow the instructions outlined in the Validate Cash Differences document to correct the running balance in your cash account.

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Last Revised: February 19, 2008 02:24 PM

SWE1964