Return Cash for an Employee Custody
Managing employee financial custodies requires precision and ongoing follow-up. One of the most important actions in this process is returning the remaining cash from a custody once its purpose has been fulfilled. In this guide, you will learn how to settle the remaining balance of an employee custody and return it to the original account in the system, along with understanding the accounting impact and restrictions that follow this action.
How to Return the Remaining Cash from an Employee Custody
To recover the remaining cash from an employee custody and close it, follow these steps:
- Navigate to the view screen of the custody you want to settle.
- Verify that the remaining balance of the custody is greater than zero, as this action will not be available if the balance equals zero.
- Click the “Return Cash” button to settle the remaining balance.
- A confirmation message will appear: “Are you sure you want to settle all the remaining balance of the custody to this employee?”
- Click “Confirm” to complete the action.
Note: This action is only available when the remaining balance of the custody is greater than zero. If the balance equals zero, the button will not appear or will not be clickable.
What Happens After Confirming the Settlement?
Once confirmed, the system automatically performs a series of accounting and administrative operations:
Balance Transfer: The entire remaining balance is automatically moved from the employee custody account back to the main account that originally funded the custody — no manual entry is required.
Journal Entry Created: The system automatically generates a journal entry reflecting this transaction. You can view it at any time from the “Transactions” tab within the custody view screen.
Activity Log Recorded: The action is automatically recorded in the custody’s activity log, capturing the action taken, the timestamp, and the user who performed it.
Custody Status Updated: The custody status automatically changes from “Open” to “Closed” as soon as the settlement is completed.
Note: Once a custody is closed, all its data becomes read-only. No fields can be edited, no settlement lines can be added or deleted, and the custody record cannot be deleted. This ensures the integrity of accounting records and prevents any alterations after settlement.
Viewing the Journal Entries Linked to the Custody
To view the journal entries generated by the system as a result of the custody settlement, follow these steps:
- Open the view screen of the closed custody.
- Navigate to the “Transactions” tab.
- You will find the settlement journal entry reflecting the transfer of the balance from the custody account back to the original account.
You can click on the journal entry to view its full details, including the debit and credit accounts and their corresponding amounts.
Note: The automatically generated journal entries are an integral part of the company’s accounting records and will also appear in the general ledger reports and financial reports associated with the relevant accounts.