Cash Management

Cash or money is the blood of a bank function. The cash department of each bank is responsible for proper cash management in its daily regular operational activities. Successful cash management includes some procedure like receipt of cash or cheque from customer, payment of cash or received cheque amount in due deligence to customers. Balancing, checking and safe custody of cash, proper management excess of cash (Possible reasons of excess cash), management of shortage of cash is the essential components of cash management of a bank.

Cash Management Account Fidelity

Besides these main function it also includes:

• Receiving cash from customers.
• Paying cash to customers.
• Transfer of cash between bank branches.
• Withdrawal/deposit of cash from respective main account or feeding branch of bank.
• Feeding/retracting cash in /from ATM.
• Safe keeping of cash.
• Maintaining tellers proof sheet, reserve cash proof sheet & Cash Balance Book.
• Maintaining limit of cash-in-safe, cash-on-counter & cash-in-transit.
• Arranging coverage of insurance for cash-in-safe, cash-on-counter & cash-in-transit.
• Safety /security of vault room during & after transaction hours.
• Packing /Banding of Currency Notes.
• Exchange of mutilated notes.

Receipt of Cash:

• Check whether deposit slip duly filled-in & signed by the client.
• Cash to be counted by cash counting machine as well as manually.
• Total Counted cash to be compared with amount written in words & figures in deposit slip.
• If amount differs, cash to be returned to customer for recount & correction of deposit slip with proper authentication. It’s preferable to obtain fresh deposit slip.
• Name & account number to be confirmed before affixing “Cash Received” seal on the deposit slip.
• Pass necessary entry in the system & affix “Posted” seal along with transaction number.
• If teller limit crosses, sent to authorizer for authorization.
• Incase of deposit of large amount AML guide lines.
• If cash received against credit voucher, the same to be duly signed by two authorized officers.
• At day end, batch journal report to be crossed checked with receiving vouchers.

Payment of Cash:

• Apparent tenor of the instruments to be all right.
• Balance of the account to be confirmed/ascertained.
• Proper entry to be passed in the system & “Posted” seal to be affixed with transaction number.
• Instrument to be cancelled and if teller limit crosses second cancellation required.
• Count the cash, obtain cheque/instrument presenter’s signature, denominations of cash written on the back of the cheque/instrument and paid to the customer.
• “Cash Paid” seal is affixed with initial of the concerned teller/cash officer
• Expenditure vouchers to be signed by two authorized officers.
• At day end, batch journal report to be crossed checked with paid instruments.

Cash Management in Accounting

Balancing, Checking and Safe Custody of Cash:

• Teller’s cash proof sheet to be tallied against balance held by the respective cash officers.
• Reserve Cash Proof Sheet to be written with total receipt and payment.
• Cash Balance Book is updated as well with total balance in words and figures.
• Denomination-wise cash position is to be written.
• Reserve cash proof sheet and cash balance book to be signed by Teller.
• A copy of the reserve sheet is sent to Finance department for record.
• Physical verification of cash position is conducted and kept in the safe.

Excess of Cash Proper Management :

• Displace or loss of cash receiving voucher.
• Receive of Excess cash against particular transaction.
• Passing of wrong amount in system or writing wrong amount in teller proof sheet/reserve sheet.
• Less amount payment.
• Deposit received but no voucher passed.

Procedure to Handle Excess Cash:

• Concerned teller’s cash is to be kept separate & counted once again in case of any excess cash.
• Batch journal report to be checked with every payment and receipt.
• All books and registers should be thoroughly checked to see if any mistakes are there.
• If not detected after through checking & counting, a transaction using cash overage option in system parks the amount in excess cash General Ledger.
• Kept in the excess cash General Ledger for six months if there is no valid claim. 

Shortage of Cash:

• Less amount received.
• Excess payment made.
• Payment made against non-receipt of debit voucher.
• Wrong entry passed.

Cash Limit:

• Cash counter Limit.
• Cash Transit Limit.
• Safe Limit.
• Enhancement of Limit.

 Beyond insurance limit no transportation of cash to be allowed.

 Set counter limit to be maintained by the teller.

 Cash amount exceeding the counter limit to be kept in the vault.

 If vault limit exceeds frequently and management feels enhancement of vault limit essential then it should be brought to the notice of concerned department with proper justification for an arrangement of enhancement of vault limit.