Receipt Allocation vs. Cash Receipts Figures

Last reviewed: 12/23/2008
Article ID: R11160

The information in this article applies to:

SUMMARY

Many firms want to keep track of monthly receipts for reconciliation purposes. You can use the Receipt Allocation Report along with an Unallocated Payments Reports for the current month and an Unallocated Payments Report for the previous month in conjunction with the following formula to compare 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 Receipts figure from the Receipt Allocation Report:

  1. Add the Unallocated Payments figure from a current Unallocated Payments Report that has been run with an Ending Payment Date of the last day of the current reporting month.
  2. Subtract the Unallocated Payments figure from the Unallocated Payments Report from the prior month.

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

Note: A Receipt Allocation Report also includes unallocated payments figures and could be substituted for an Unallocated Payments Report. However, it must be run again for a custom time frame that includes all receipts with an open beginning date through the end of the current reporting month. 

If a Prior Month's Unallocated Payments Report is not Available:

You could use a current Allocated Payments Report as a substitute for the prior month's Unallocated Payment Report to determine the amount of the prior month's receipts that were allocated during the current month. To do so, run the Allocated Payments Report using the beginning and ending days of the current reporting month for the Payment Allocation Date. You will need to identify any payments on the report that have a payment date prior to the current month and manually add those payment amounts together. Then, if you subtract this figure from the Current Month's Receipts figure from the Receipt Allocation Report and add Unallocated Payments from the Current Month, this result will match 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 payments that were dated before the current month but were entered since the end of the prior month will also invalidate the formula. The payment amount would appear on the Receipt Allocation Report, but not on the Cash Receipts Report.
  3. There can also be discrepancies if the reports were run at different times (e.g., the Receipt Allocation Report run at month-end and the Cash Receipts Report run later in the month).

References

THE INFORMATION PROVIDED IN THE SOFTWARE TECHNOLOGY, INC. KNOWLEDGE BASE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. SOFTWARE TECHNOLOGY, INC. DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL SOFTWARE TECHNOLOGY, INC. OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES WHATSOEVER INCLUDING DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, LOSS OF BUSINESS PROFITS OR SPECIAL DAMAGES, EVEN IF SOFTWARE TECHNOLOGY, INC. OR ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES SO THE FOREGOING LIMITATION MAY NOT APPLY.

© 1999-2012 Software Technology, Inc.   All rights reserved. Terms of Use
The maker of Tabs3 and PracticeMaster
Tabs3, PracticeMaster, and the “pinwheel” symbol (The "Pinwheel" symbol is a Registered Trademark of Software Technology, Inc.) are registered trademarks of Software Technology, Inc.
e-Mail Suggestions for the Knowledge Base to: kb@Tabs3.com
Technical Support via e-mail is not available.
Knowledge Base:   http://support.Tabs3.com
Web Site:   http://www.Tabs3.com