Integration with the Sales and Purchase Ledgers

If you deal solely in cash, you can enter cash transactions directly to the Cash In and Cash Out registers. You should use the Cash In register for incoming (sales) cash transactions, and the Cash Out register for outgoing (purchasing) cash transactions. You can also use these registers to record cash payments against existing Sales and Purchase Invoices and Credit Invoices, cash deposits (Prepayments), and cash payments made to and received from members of staff.

The Cash In and Cash Out registers do not keep a record of the Items bought and sold. So if your cash transactions have stock implications, you might prefer to enter them initially as Invoices and Purchase Invoices with "Cash"-type Payment Terms. You can then create cash transactions from those Invoices and Purchase Invoices using the 'Create Cash In' and 'Create Cash Out' Operations menu functions, and the 'Create Collection Cash In' and 'Create Collection Cash Out' Maintenance functions. This will ensure all cash transactions (including those with stock implications) are gathered together in the Cash In and Cash Out registers, and that they all appear in the Cash Book report. This will be useful in countries where incoming cash transactions need to be recorded together using a sequential number series, and outgoing cash transactions need to be recorded together as well.

If you will be using the 'Create Cash In'/'Create Cash Out' and the 'Create Collection Cash In'/ 'Create Collection Cash Out' functions to create cash transactions from Invoices, you should enter appropriate Payment Terms and Payment Modes in the respective settings and set up the Cash Book module correctly to ensure the Nominal Ledger is correct. Two methods are available: the "Single Transaction" method and the "Double Transaction" method.

Single Transaction Method

If you are using the Single Transaction method, your cash transactions will be recorded in the Nominal Ledger in Transactions created from Invoices and Purchase Invoices only. Cash In and Cash Out records created from these Invoices will not cause Nominal Ledger Transactions to be created. Records entered directly to the Cash In and Cash Out registers with no related Invoice will generate Nominal Ledger Transactions. This system might be suitable where invoicing and cash handling are carried out by a single person or in a single office.

To set up a Single Transaction system, follow these steps:

1. In the Sub Systems setting in the Nominal Ledger, ensure the Invoice, Purchase Invoice, Cash In and Cash Out options are switched on.
   

2. In the Cash Book module, switch on the Cash Collection option in the Cash Book Settings setting, and switch off the Payment Mode Control option.
   

3. Again in the Cash Book module, enter at least two Payment Modes. In both, set the Type on flip B to "Cash". In the N/L column on flip C, set one Payment Mode to "GenTrans" and one to "Do Not GenTrans". If you have more than one Cash Account, enter a twin set of Payment Modes for each one. In this circumstance, it is recommended that you use a different Number Series for each "Do Not GenTrans" Payment Mode. This will help you make the most of the 'Create Collection Cash In' and 'Create Collection Cash Out' Maintenance functions.
   

4. Enter one Payment Term record with a Cash Account and where the Type is "Cash". You can do this using the setting in the Sales or Purchase Ledgers. If you have more than one Cash Account, enter a separate Payment Term for each one.
   

5. When entering a Cash Invoice or Purchase Invoice, enter the appropriate "Cash" Type Payment Term. When you approve and save the Invoice, it will be treated as paid. There will not be a posting to a Debtor or Creditor Account, but instead there will be one to the Cash Account from the Payment Term.
   

6. Once you have approved the Invoice, you can create a Cash In or Cash Out record from it by selecting 'Create Cash In' or 'Create Cash Out' from the Operations menu. If you have several Invoices, you can create a single Cash In or Cash Out record from them using the 'Create Collection Cash In' or 'Create Collection Cash Out' Maintenance functions.
   

   Enter the appropriate Payment and Corresponding Modes to these Cash In and Cash Out records. The Payment Mode should be "Do Not GenTrans". This will mean that when you approve these Cash In and Cash Out records, no Nominal Ledger Transactions will be generated. You must specify a Corresponding Mode, but the choice is academic because there will not be a Nominal Ledger Transaction.
   

7. You should also follow the procedure described in steps 5 and 6 when you enter Receipts and Payments. Use a "Do Not GenTrans" "Cash" Type Payment Mode in each Receipt and Payment. This will be transferred to the resulting Cash In and Cash Out records, which will therefore not generate Nominal Ledger Transactions when you approve them.
   

8. If you need to enter a cash transaction that has no stock implications, you can enter it directly to the Cash In or Cash Out registers. In this case, specify the "GenTrans" Payment Mode. When you approve the record, a Nominal Ledger Transaction will be generated.
   

9. The Cash Book Settings setting allows you to specify the Payment and Corresponding Modes that you want to be used as defaults in new Cash In and Cash Out records. Take care with this feature if you are using the Single Transaction method. When creating Cash In and Cash Out records from Invoices (step 6) and Receipts (step 7), you should use a "Do Not GenTrans" Payment Mode, but when entering cash transactions with no stock implications (step 8), you should use a "GenTrans" Payment Mode. Specifying a default Payment Mode may therefore cause confusion, because there will be circumstances where the default is wrong. However, you must specify a default Payment Mode if you want to use the 'Create Collection Cash In' or 'Create Collection Cash Out' Maintenance functions. When creating Cash Out records from Payments (step 7), the Payment Mode in the Cash Out will be copied from the Payment and so the default will not apply.

Double Transaction Method

If you are using the Double Transaction method, your cash transactions will be recorded in the Nominal Ledger in Transactions created both from Invoices and Purchase Invoices and from the Cash In and Cash Out records created from these Invoices. Records that you enter directly to the Cash In and Cash Out registers with no related Invoice will also generate Nominal Ledger Transactions. This system might be suitable where invoicing and cash handling are carried out in a different offices or departments.

To set up a Double Transaction system, follow these steps:

1. In the Sub Systems setting in the Nominal Ledger, ensure the Invoice, Purchase Invoice, Cash In and Cash Out options are switched on.
   

2. In the Cash Book module, switch on the Cash Collection option in the Cash Book Settings setting, and switch off the Payment Mode Control option.
   

3. Again in the Cash Book module, enter one Payment Mode. Set the Type to "Cash" on flip B. In the N/L column on flip C, choose "GenTrans". The Account should be the Cash Account.
   

4. Enter one Payment Term record in which the Type is "Cash" and with a temporary holding Account specified in the Cash Account field. You can do this using the setting in the Sales or Purchase Ledgers.
   

5. Enter one Corresponding Mode in which the Account is the temporary holding Account specified in the Payment Term record. You should do this using the setting in the Cash Book module.
   

6. If you have more than one Cash Account, repeat steps 3, 4 and 5 for each one.
   

7. When entering a Cash Invoice or Purchase Invoice, enter the appropriate "Cash" Type Payment Term. When you approve and save the Invoice, it will be treated as paid. There will not be a posting to a Debtor or Creditor Account, but instead there will be one to the temporary holding Account from the Payment Term.
   

8. Once you have approved the Invoice, you can create a Cash In or Cash Out record from it by selecting 'Create Cash In' or 'Create Cash Out' from the Operations menu. If you have several Invoices, you can create a single Cash In or Cash Out record from them using the 'Create Collection Cash In' or 'Create Collection Cash Out' Maintenance functions.
   

   Enter the appropriate Payment and Corresponding Modes to these Cash In and Cash Out records and approve them. Nominal Ledger Transactions will be generated, moving the amounts out of the temporary holding Account and in to the Cash Account specified for the Payment Mode. If you only have one Payment and Corresponding Mode, you can have them offered as defaults using the Cash Book Settings setting.
   

9. If you need to enter a cash transaction that has no stock implications, you can enter it directly to the Cash In or Cash Out registers. You will probably need a separate Corresponding Mode for this purpose. When you approve the record, a Nominal Ledger Transaction will be generated.