When you put money into a bank, the bank opens an account for you. When you open a new account you must know:
The easiest kind of account for an organisation to use is a cheque or current account. The committee of your organisation decides who is allowed to sign for money. The bank will only give money to those people whom they know are allowed to sign for money. There should be at least two (2) signatories to the account. This means two signatories must sign before money can be withdrawn from the account. The two signatories should be members of the management or executive committee who are usually available to sign cheques. It is better not to have any of the paid employees as signatories.
The cheque book is used to draw money out of the account. Only those signatories who have authority to sign your organisation’s cheques can sign. Cheques can also be used to pay someone directly, such as for rent or electricity and are usually used for payments over R50. Money can also be transferred electronically into people’s accounts but if you want to implement an electronic system you will need to put strict guidelines and clear restrictions as to who will have the authority to do these transfers.
Cash can be taken out of the bank to make small payments, such as for stamps, tea, paper and so on. This money is called petty cash and it is usually kept in a safe place in a small money box in the office. Put all receipts in the petty cash box so it is easy to account for spending.
Putting money into the account – Putting money into the account is called making a deposit. When you deposit money you fill in a form at the bank called a deposit slip. A copy of the deposit slip will be given to you. You must file this for your records.
Taking money out of the account is called a withdrawal. With a cheque account, you use a cheque to withdraw money. A cheque is a form that can be used instead of money. On the left hand side of the cheque is the STUB. The stub stays in the cheque book as your record of the cheques you sign. It is important to fill in the stub carefully. If you are paying electronically (EFTs) you should print out the payment confirmation (receipt) and file that.
The bank statement – Once a month you will receive a bank statement. This is a record of cheques issued, or EFTs made in that month and of all the deposits and withdrawals made that month.