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Account entries

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This document offers guidelines on how to manage your accounting entries in relation to the Netcash system and processes. Please note that it is only a suggestion and is used at your own discretion.

Transaction Types and Associated General Ledger Transactions

There are five types of transactions which can occur on your Netcash account. These are listed below together with a brief description of each, and the associated general ledger ‘double entry’.

Accounting entries

The possible accounting entries that you may want to generate from these transaction types, together with a recommended GL Account will be illustrated in this document. In our suggested accounting setup, it is imperative that you set up your Netcash account as a Bank Account and as such reconcile it as you would any other bank account. A detailed Netcash Statement is available on the system for reconciliation purposes.

General ledger account list

  • A recommended chart of accounts to use for Netcash related transactions would be the following:
  • Netcash cashbook. We suggest that you set up this Netcash Account in the cashbook and treat it as a ‘bank account’ as it is in effect a ‘Cash’ account. This will enable you to transact against your Accounts Receivable and Accounts Payable sub-ledgers.
  • Accounts Receivable. Setup a sub-ledger for each of your client/s.
  • Income account to reflect the relevant income for which you are debiting.
  • Bank account which is your bank account registered with Netcash.
  • Fees account for fees charged by Netcash.
  • Accounts Payable sub-ledger for each one of your creditors.

Transaction types and Associated General Ledger Transactions

A simplified example of a Netcash Statement is shown below together with the standard accounting transactions which we recommend for each transaction type. A T-account general ledger illustrates the transactions using the values indicated in the Netcash statement.

Same day/ Two day debit orders

These are debit orders which you load onto the Netcash system to collect funds from clients. Raise the debtors in the Account Receivable sub-ledger prior to generating the debit order file

  • Debit – Accounts Receivable (per debtor)
  • Credit – Income (relevant income account per business)

Raise a virtual receipt transaction for the actual value of the debit order in the ‘Netcash Cashbook’, which will zero out the various debit order clients. The Netcash Account balance will now reflect the expected asset prior to fees.

  • Debit – Netcash Account
  • Credit – Accounts Receivable (per debtor)

Service fees

These are pre-determined and agreed fees for transactions processed on your behalf on the Netcash system.
This transaction raises the fees payable to Netcash. This decreases the expected gross debit orders and now reflects the net money receivable from Netcash. The fee expense is also accounted for. This transaction can be obtained from your statement obtainable from the Netcash website.

  • Debit – Netcash fees expense
  • Credit – Netcash account

Bank transfer

Payment by Netcash to the merchant, of funds available of debit orders collected on their behalf. This transaction represents funds in the Netcash account less any retentions, having already taken into account fees and unpaid transactions.

  • Debit – Bank account
  • Credit – Netcash Account

Debit order unpaids

Debit orders submitted by the merchant which have not been honoured (e.g. insufficient funds, account closed, etc)
This transaction represents any unpaid debit orders for various reasons, run against debtors. Again, this will decrease the value of the final amount owing to you by Netcash.

  • Debit – Accounts Receivable (per debtor)
  • Credit – Netcash Account

Same day / Dated Salary or Creditor Payments

Your creditors are paid according to data uploaded and released by you onto the Netcash system.
Raise the creditors in the Account Payable sub-ledger prior to generating the payment file

Debit – Expense (relevant expense account per business)
Credit – Accounts Payable (per creditor)

Raise the payment of creditors when you upload the payments onto the Netcash system. These payments can be made against funds available in your Netcash account. Debit Accounts Payable (per creditor)

Debit – Accounts Payable (per creditor)
Credit – Netcash Account

Deposits

Transfer of funds to Netcash to have funds available for Creditor/ Salary Payments service via the Netcash System.
Transfer of funds to Netcash for Creditor/ Salary Payments.

  • Debit – Netcash account
  • Credit – Bank Account

Pay Now

Payments into the Netcash system from Netcash online payment services e.g. EFT, Instant EFT, credit cards

  • Debit – Netcash Account
  • Credit – Income Account

Statement example

General ledger example

Need more assistance?
Contact your Relationship Consultant on 0861 338 338 or email us on support@netcash.co.za