BASIC RECORD KEEPING AND REPORT WRITING

Every co-operative society carrying out business operations is expected to keep and maintain proper books and records to show how it receives money and how it uses the money. The primary documents which are used to show money transactions include:

•   the official receipt

•   the payment voucher

•   the cash journal

A thief broke into my house last night looking for money, so I woke up and started searching with him :-)

Other useful records and reports include and not limited to:

•   Ledgers

•   Journals (non cash transactions)

•   Bank reconciliation

•   The reports (cash-flow statements, loan performances, prudential standards performance etc)

The Official Receipt

This is a receipt used by the society to acknowledge all money received in the society office. the money can be in physical cash, cheque or banking slip. The receipt is issued immediately money is received.

The receipt should indicate to whom it was issued, the purpose of the money, the date the money was received and the signature of the person receiving the money. Examples of money paid to the society include; entrance fees, share/savings contributions, loan repayment, sales of stationery etc.

The receipts are contained in a booklet and each is in three copies, the original and two duplicates. the original is issued to the person paying the money.   The duplicates remain in the society for records and book keeping.This is an important accounting document and should be kept securely by the authorized person.

The Payment Voucher

This is a document that is used to show money moving out of the society in form of payments. Every time expenditure is incurred and payment is made, the transaction should be recorded using a payment voucher.  No payment should be made without recording it in a payment voucher.

The voucher should clearly indicate the name of the person being paid, the purpose of the payment, and the date of the payment. If handed over to the payee, then the person should sign the voucher to acknowledge receipt of the money. If payment is made by issuing a cheque, then the cheque number should be indicated on the voucher.

When a payment is for expenditure where a cash receipt has been obtained, then the receipt should be attached to the payment voucher.

All payments should be known and authorized by the relevant officials. the officials should authorize payments by signing the payment vouchers. Payments that may be made in co-operative societies include; purchase of stationery, travel and subsistence, sitting allowance, office rent etc. The original copy of the voucher should remain in the society for accounting purposes.

The copies of the official receipt and payment vouchers should be systematically filed in a payment voucher and official receipt file. If the transactions of the society are many and the documents are bulky, then separate files for the two documents may be used.

The two are important documents and the files containing them should be systematically given folio numbers that start from the beginning of the financial year.

The Cash Journal

This is a book that shows a summary of all cash transactions from the official receipt and payment vouchers. The two documents are the source of information for the cash journal.

The cash journal has both cash column showing all cash transactions and bank columns showing all bank account transactions. The entries in the cash journal are made daily when cash transactions take place.

The cash journal is balanced at the end of each month to show the total money that was received and how much money moved out.

The cash journal is a source of information for updating ledgers for individual accounts. the ledgers will be source documents for preparation of trial balance. The trial balance is a summary of individual ledgers and shows actual performance of the society.

EXCERPT FROM: Savings and Credit Co-operative Societies; Start-up Kit (Swiss Contact and Department of Co-operatives)