CARA'S TIPSMethods of payment, cheques and the imprest (petty-cash) system
WAECNECO
What the syllabus asks
WAEC: meaning and importance; methods of making payment (cash, cheque, postal orders, money order, money transfer, standing order, credit transfer, electronic transfer); imprest account (meaning and preparation). Wages and salaries are in op8. Extends cm4.8–4.10 and cm6.3.
NECO: meaning and importance; methods of making payment (cash, cheque, postal orders, money order, money transfer, standing order, credit transfer, electronic transfer); imprest account (meaning and preparation). Wages and salaries are in op8. Extends cm4.8–4.10 and cm6.3.
What you will learn
- Define office procedure and explain its importance and features.
- Describe each method of payment with advantages and disadvantages.
- Explain types of cheques and reasons for dishonour.
- Distinguish standing order, direct debit and credit transfer.
- Choose a suitable payment method for given situations.
- Explain the imprest system and prepare an analytical petty-cash book.
- Describe petty-cash vouchers and controls.
Key points
- Procedures give uniformity, control, training and continuity.
- Cash is immediate but risky and leaves no automatic record.
- Cheques: drawer, drawee, payee; crossed cheques go into accounts.
- Postal orders (small) and money orders (larger) use the post office.
- Money transfer moves funds through banks, agents or mobile money.
- Standing order: fixed and regular; direct debit: variable and payee-led.
- Credit transfer pays many payees with one instruction.
- E-payments are fast but need fraud controls and confirmation.
- Imprest: fixed float, cash + vouchers = imprest, reimburse spending.
- Analyse petty cash by expense type and cross-cast totals.
Start here: Meaning and importance of office procedures
An office procedure is a series of related clerical steps, performed in a set order, by which a particular kind of office work is done. Examples: the procedure for handling incoming mail, for paying a supplier, for issuing stationery, for preparing the payroll, for receiving a visitor. Procedures are often written down in a procedure manual (office manual) and may be shown as a flowchart.
A routine is a procedure that is repeated regularly in the same way, such as the daily banking of takings. A method is the way a single step is performed, for example by hand or by computer. A system is a network of related procedures, such as the purchasing system.
Importance of office procedures
- Uniformity: work is done in the same way by all staff, so results are consistent.
- Efficiency: unnecessary steps are removed and work flows smoothly.
- Control: authorisation and checking steps prevent errors and fraud.
- Training: new staff learn quickly from the manual.
- Continuity: work continues when an officer is absent or leaves.
- Fixing responsibility: each step names who does it.
- Saving cost and time: standard forms and routines reduce waste.
- Basis for improvement: written procedures can be studied and improved (organisation and methods, O&M).
Features of a good procedure
Simple; written and known to staff; logical sequence without back-tracking; built-in checks and authorisation; flexible enough to update; economical in staff, time and forms; and suited to the equipment available.
Office procedures in the WAEC syllabus
Under topic 7, WAEC examines three groups of procedures: methods of making payment (this unit), wages and salaries (op8), and the imprest account (this unit). Other procedures appear under reception (op4), mail (op9) and filing (op10).
Example: the procedure for paying a supplier
(1) Stores prepares a GRN when goods arrive. (2) The invoice is received and stamped with the date. (3) The accounts clerk matches invoice, order and GRN. (4) A payment voucher is prepared and supporting documents attached. (5) The head of department approves; internal audit checks. (6) The authorised signatories approve the transfer or sign the cheque. (7) Payment is made and the supplier is advised. (8) The voucher is stamped PAID and filed. Writing this sequence in a manual, with the officer responsible for each step, is what turns habit into a procedure.
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Practice questions
- stale
- post-dated
- crossed
- open
Show answer
A: stale
CBN clearing rules.
- stale
- dishonoured
- bearer
- post-dated
Show answer
D: post-dated
Future date.
- sent abroad
- torn
- paid into a bank account
- cashed over the counter
Show answer
C: paid into a bank account
Two parallel lines.
- a ₦500 fine
- two years’ imprisonment without option of fine
- a warning only
- one month’s community service
Show answer
B: two years’ imprisonment without option of fine
Act, Cap. D11.
- three months of its date
- one week
- six years
- twelve months
Show answer
A: three months of its date
s.1 of the Act.
Key words
- Office procedure
- Set sequence of clerical steps.
- Procedure manual
- Written guide to office procedures.
- Drawer
- Person who writes a cheque.
- Drawee
- Bank ordered to pay a cheque.
- Crossed cheque
- Cheque payable only into an account.
- Postal order
- Post-office document for sending small sums.
- Money order
- Post-office service for sending larger sums.
- Standing order
- Bank instruction to pay a fixed sum regularly.
- Direct debit
- Mandate letting a payee collect variable sums.
- Credit transfer
- One instruction crediting many accounts.
- Imprest
- Fixed petty-cash float restored periodically.
- Petty-cash voucher
- Signed support for a petty-cash payment.
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