Sales cycle and documentation - Cash sales, card receipts, a...

Learning Outcomes

After reading this article, you will be able to identify and document cash sales, process card receipts, and describe till and point-of-sale procedures. You will learn to distinguish key documents, understand practical control measures for sales income, and accurately record and reconcile sales in accordance with ACCA FA1 requirements.

ACCA Recording Financial Transactions (FA1) Syllabus

For ACCA Recording Financial Transactions (FA1), you are required to understand and apply robust procedures for cash and card sales, ensuring accuracy, security, and proper documentation. Revision for this article should focus on:

• The processing and recording of cash sales and card receipts
• Recognition and handling of sales documentation, including till rolls and cash register totals
• The procedure for verifying, documenting, and reconciling daily sales
• Systems and controls over point-of-sale to prevent errors and fraud
• The importance of securing, banking, and recording daily takings
• The flow and retention of supporting documentation in the sales cycle
• Security and control measures at the till and throughout cash handling

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. A retail store takes payments both by cash and debit card at the till. Which ONE of the following documents would you expect to use when reconciling total sales for the day?
   1. Bank reconciliation statement
   2. Till roll
   3. Purchase order
   4. Creditor statement
2. Which item is a key control procedure to help prevent theft at the cash register?
   1. Allowing customers to operate the till
   2. Retaining a printed till roll and reconciling to counted cash and card receipts
   3. Recording sales only at the end of the day
   4. Allowing all staff unrestricted access to the till drawer

3. State the two main categories of sales receipts a retail business should record at the point of sale.

4. Why must sales documentation, such as till rolls, be retained even after daily banking has occurred?

Introduction

Cash sales and card receipts are at the centre of many business operations—particularly in retail or hospitality settings. Sound procedures and documentation at the point-of-sale (POS) help ensure all income is recorded accurately, regulated, and banked safely. Effective control over tills and receipts not only helps with accurate financial reporting but also guards against loss, theft, and fraud.

This article explains the proper procedures and key documentation involved in recording cash and card sales. It covers how till rolls, end-of-day reconciliations, and robust security procedures protect businesses, and how the details flow into the accounting system.

Key Term: cash sale
A sale where payment is received immediately, typically in cash or by card, at the point-of-sale.

SALES DOCUMENTATION AND THE POINT OF SALE

Sales transactions are documented and processed through the till (cash register) or electronic point-of-sale (POS) system. Each method produces documentary evidence that is essential for financial control, record-keeping, and exam success.

Till Procedures

Every sale, regardless of payment method, should be recorded in the till at the time the transaction takes place. Staff must input each sale accurately; the till then issues a printed receipt to the customer and records the sale in the till's memory or till roll.

Key Term: till roll
A printed document generated by a cash register or POS system listing all sales transactions for a given period, usually a trading day.

At the end of the trading session, the total on the till roll should equal the sum of all payments received—cash, card, vouchers, and other forms.

Flow of Sales Documentation

Key stages in cash/card sales documentation include:

1. Sale entered at till: Item-by-item or total, depending on system.
2. Receipt generated: Issued to customer as evidence of sale.
3. Till roll printed: Lists every transaction for the period.
4. End-of-day reconciliation: Actual cash and card receipts are compared to till roll totals.
5. Banking summary prepared: Takings are banked, and a record is retained.

Key Term: sales receipt
A document issued to a customer as evidence that payment has been made for goods or services at the time of sale.

Card Receipts

For card payments, the till or card terminal produces an additional summary or receipt. These card receipts are settled to the business's bank account, often after merchant verification. At day's end, all card slips must be reconciled to card summary reports and the till roll.

Key Term: card summary
A report listing all card transactions processed through a till or card machine for a single shift or business day.

Worked Example 1.1

A retail assistant at a shop processes the following in one morning: cash sales totalling £255 and card payments totalling £345. The till roll, when printed at lunchtime, shows total sales of £600. When counting, the cash in the till is £255, and all card receipts are matched to card slips and summary.

Question: What documentation should the business retain to prove total sales match receipts, and what should be recorded in the accounting system?

Answer:
Documentation to retain includes the till roll, the cash count sheet, card slips or card summary report, and banking summary. The accounting records should show a cash sale of £255 and card receipts of £345 for the shift.

Security Procedures and Controls

Internal controls are essential at every stage of sales processing:

• Restrict till access to authorised staff only
• Reconcile cash and card receipts to till roll totals daily
• Require two staff to verify the cash count
• Investigate discrepancies immediately and document explanations
• Store till rolls, card slips, and other sales documentation securely

Key Term: reconciliation
The process of comparing cash and card receipts with till roll totals to ensure all income is accounted for.

Worked Example 1.2

At closing, a manager finds that the till roll total is £2,000. Cash counted is £1,500, and card receipts according to the merchant summary are £450.

Question: Is the documentation in agreement? What steps must be taken if there is a difference?

Answer:
Cash plus card totals £1,950, which is £50 less than the till roll. The manager should re-count, check card receipts for omission/errors, review voided/returned transactions, and if the difference remains, document the shortfall and escalate according to company policy.

Exam Warning

Always document and reconcile sales cash daily. Mistakenly relying on memory or informal notes can lead to errors, unaccounted discrepancies, or fraud—leading to failed audit checks or exam marks lost.

CONTROLLING AND BANKING SALES RECEIPTS

All cash and card payments received must be physically secured and banked with minimal delay. Delayed banking increases risk.

• Bank receipts daily where possible
• Retain a copy of the paying-in slip with sales records
• Match banking records to till documentation

Key Term: paying-in slip
A form listing all cash and cheques to be deposited at the bank, submitted with the funds for processing.

If any part of the sale is returned or voided, staff must ensure a 'refund' or 'void' receipt is attached to the till roll and the correction is entered into the system.

Key Term: refund receipt
Document showing that a specific amount has been returned to a customer, reducing total sales for that day.

Key Term: void transaction
An item or sale cancelled in the till system, with a record showing it should not be counted in daily total sales.

Summary

Accurate sales documentation for cash and card transactions depends on strict till procedures, timely reconciliation, and controlling the movement of receipts from the till to the bank. Retaining till rolls, card summaries, and banking documents ensures all sales are properly recorded, discrepancies identified, and exam standards met.

Key Point Checklist

This article has covered the following key knowledge points:

• The definition and role of tills, till rolls, and sales receipts
• How to process and document cash and card sales
• The need for and method of reconciling till rolls to receipts
• Control measures to safeguard sales income and prevent errors or fraud
• The purpose and retention of paying-in slips, voids, and refund documentation
• The correct flow of sales documentation into the accounting system

Key Terms and Concepts

• cash sale
• till roll
• sales receipt
• card summary
• reconciliation
• paying-in slip
• refund receipt
• void transaction