Strengthening Internal Controls with Remittance Advices in Cash Receipts Processing.

As a part of the internal control over cash receipts by mail, the mailroom sends both the customer checks and the remittance advices to the accounting department

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The practice of sending both customer checks and remittance advices to the accounting department by the mailroom is a sound internal control measure. This control ensures that there is a clear separation of duties between the personnel processing the mail and the personnel responsible for posting entries in the accounting system.

The remittance advice is a document that accompanies the payment and contains all the information relevant to the transaction. It includes details like the customer’s name, invoice number, and the amount paid. By sending this information along with the check, the accounting department can easily reconcile the payment with the appropriate invoice and ensure that all payments are properly recorded in the accounting system.

Another benefit of this control is that it also provides an audit trail. If any discrepancies or issues arise, the remittance advice can be used as a reference to investigate the root cause of the problem and ensure that any necessary corrective actions are taken.

Overall, this control helps to promote accuracy and completeness in the cash receipts process and provides greater assurance that all payments are accounted for in a timely and accurate manner.

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