Author: Sanjeev Chib
Managing your trust bank account can be complex, especially with such large volumes of invoices to keep track of. Which is what makes the Merang TravelOffice such a useful tool for travel companies as it keeps track of and helps you control the cash flowing into and out of trust.
Setting up and using a Trust Bank Account for your business is always a good idea (even if it is not required in your area). The Trust Bank Account will ensure that there is always money available to pay-off suppliers from the cash received from customer sales, and only the difference (i.e. commission) is transferrable to a “General” Bank Account to pay you overheads (i.e. rent, advertising, payroll) etc.
Many of our users have been asking us to provide them with some step-by-step guidelines on what to do with customer deposits and supplier payments. So, below is our step-by-step guide on how to record and reconcile customer deposits and supplier payments using the Merang TravelOffice system. Remember, not all steps need to be performed daily; the reconciliations can be done monthly, quarterly, or annually.
So here goes:
A. Customer Deposits Received:
1. Deposit: When you receive cash from the customer, deposit the cash in your trust bank account (within 3 days per TICO), and make a note of this deposit in your deposit book you obtained from the bank. In your deposit book, record the date you deposited it, the invoice number (from the merang system) and the amount, so that you can later reconcile it.
2. Record: In the merang system, go to the second page of the invoice (“Customer Fare Received” tab), and click on “Add Payment”. Select the method of payment (e.g. cash/cheque), the date the money was received, the amount, and who it was received from.
[Note: If the invoice is already marked as "Complete" or "Accounting", then you can record the amount recieved by logging into the back-office, click on "Accounts Receivable-Customer" (gives a list of invoices for which amounts are still receivable from customers), and record the amount received here.]
3. Reconcile: On a monthly, quarterly, or annual (you decide) basis , you need to reconcile (i.e. match) what is recorded in the merang system to what was deposited in the trust bank account. To do this, simply login to the back-office, click on “Accounts Receivable-Customers”, and then from the left-side menu, click on “Reconcile Cash Receipts”. This will give you a list of all amounts that you had recorded as received from customers, that you need to reconcile to your deposit book/bank statement.
Match the invoice number & amount from merang to what is listed in the deposit book and the bank statement – click on “Reconcile” and record the date the amount was deposited into the trust bank account.
B. Payments Made to Suppliers:
1. Pay and Record: When you pay the supplier, go to the last page of the invoice (“Supplier Payments” tab), and click on “Add Payment”. Select the method of payment (e.g. cash/cheque, or company credit card), the cheque number (if any), date the money was paid, and the amount.
[Note: If the invoice is already marked as "Complete" or "Accounting", then you can record the amount paid by logging into the back-office, click on "Accounts Payable-Supplier" (gives a list of invoices for which payment is due to suppliers), and record the amount paid here.]
2. Reconcile: On a monthly, quarterly, or annual (you decide) basis, you need to reconcile (i.e. match) what is recorded in the merang system to what was paid from the trust bank account. To do this:
a. If amount was paid to supplier by cheque/cash/draft:
Simply login to the back-office, click on “Accounts Payable-Supplier”, and then from the left-side menu, click on “Reconcile Payments”. This will give you a list of all amounts that you had recorded as paid to suppliers, that you need to reconcile to your bank statement.
Match the invoice number & amount from merang to what is listed in your cheque stubs and bank statement – click on “Reconcile” and record the date the amount was withdrawn from the trust bank account (based on the bank statement).
b. If amount was paid to supplier by Credit Card:
Simply login to the back-office, click on “Accounts Payable-Company Credit Card”. This will give you a list of all amounts that you had recorded as paid to suppliers by credit card, that you need to reconcile to your credit card and bank statements.
Match the invoice number & amount from merang to what is listed in your credit card statement, and bank statement – click on “Reconcile” and record the date the amount was withdrawn from the trust bank account to pay the credit card statement.
C. Transferring Commission Amounts from Trust to General Accounts:
Only once the above steps A and B are completed (including reconciling), then you can transfer the amounts from the trust to the general account. To do this, log into the back-office, and click on “Cash – Trust Account”. This will give you a list of all invoices that have been fully reconciled (both the deposit side and the payment side) and the amounts that you can transfer to the general account. Once you have transferred the cash from trust bank account to your general bank account, you can record them as transferred here so that you don’t end up transferring them again.
