Receipt Allocation vs. Cash Receipts Figures

Last reviewed: 06/04/2007
Article ID: R10228

The information in this article applies to:

SUMMARY

Many firms want to keep track of monthly receipts for reconciliation purposes. You may use the Receipt Allocation Report in conjunction with the following formula to determine the current month's receipts.

MORE INFORMATION

The following formula can be used to reconcile the Cash Receipts Report and the Receipt Allocation Report:

Take the Current Month's MTD PAID figure from the Receipt Allocation Report:

  1. Add the Unallocated Payments figure from the Current Month's Receipt Allocation Report.
  2. Subtract the Unallocated Payments figure from Last Month's Receipt Allocation Report.

The result will be the Current Month's Receipts which should match the Current Month's Cash Receipts Report.

The following conditions will invalidate the formula or will require additional considerations in the formula:

  1. Placing payments on "hold" will invalidate the formula because the Receipt Allocation Report does not include payments on "hold", whereas the Cash Receipts report does include payments on "hold".
  2. Any processed payments dated after the Receipt Allocation WIP payment cut-off date will invalidate the formula because these payments are reflected on the Receipt Allocation Report but not on the Cash Receipts Report.
  3. Any payments that were dated before the current month but were entered since last month's productivity totals were cleared will also invalidate the formula. The payment amount would appear on the Receipt Allocation Report, but not on the Cash Receipts Report.
  4. Editing the Receipt Allocation file and/or the Client Ledger file can cause discrepancies.
  5. Reversed payments with a reversal date outside the current month will show reversals on the current month's Receipt Allocation Report but not on the Cash Receipts Report.
  6. Combining Client Ledger Information will distort payment figures on the Cash Receipts Report.
  7. Deleting or changing a prior month's WIP payment will reflect the correction in the current month's Receipt Allocation Report but not the Cash Receipts Report.
  8. If last month's Receipt Allocation Report was run with a WIP payment cut-off date after the Month-end date and there were WIP payments included on the Receipt Allocation Report and the Clear Productivity Totals program was run, those WIP payments will not appear on the current month's Receipt Allocation Report even though they were updated in the current month.
  9. There can also be discrepancies if the reports were run at different times (i.e., the Receipt Allocation Report run at month-end and the Cash Receipts Report run later in the month). The Receipt Allocation Report could be excluding WIP payments that are reflected on the Cash Receipts Report.

Special Note: The Receipt Allocation Report must be run on a regular basis in order to maintain month-to-date and year-to-date accuracy. The report that is run prior to running the Clear Productivity Totals program must be run by Primary, Secondary or Originating Timekeeper (i.e., not Working Timekeeper), include all clients and must use the correct month-end WIP payment cut-off date.

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