PROCEDURES FOR MAKING PAYMENT

Business transactions involve the exchange of

money or money’s worth for goods and services. In modern
transactions, the process of exchange as become faster and
less stressful. The methods of payment include:
1.CASH: Cash is the legal tender that is acceptable for
making payments for goods and services. Legal tender
refers to currency.
2.CHEQUE: A cheque is a written instruction to a bank to
pay on demand a specified amount of money to a
named person.
3.BANK DRAFT: A bank draft is a cheque drawn by a bank
itself or on any of its agent. This means the bank is both
the drawer and drawee. To use the bank draft, you visit
any bank and pay a certain amount plus charges. The
bank will then give you a draft that bears the name of
the person or organization you intend to pay.
4.BANK TRANSFER: This method of payment allows funds
to be transferred from one account to another with the
help of a bank official. You can also pay cash directly
 into a person’s account after filling deposit slip at the
counter.
5.E-PAYMENT: In modern times now, you do not need to
physically visit a bank to make payment or transfer
funds. E-payment is a method of payment that allows
you to instantly transfer funds to another account
anywhere in the world through internet.

PAYMENT OF WAGES AND SALARIES

Money paid to employees by business
organization are either daily, weekly or monthly. A wage is
payment made to unskilled labor by a business organization
for jobs done. They are paid daily or weekly. Salary is an
amount paid to workers at the end of each month for work
done.
METHODS OF PAYING WAGES
1.Piece Rate: the amount earned is related to the work
done. This method is an incentive to increase output.
2.Profit sharing method: under this system, a worker
has a standard wage but also gets an agreed part of
the profit.
 3.Commission basis: this is usually for salesmen. They
are paid a certain percentage of their total sales.
4.Premium bonus system: in this system, wages are
based on doing a given job within a standard time.
Bonus is offered to the worker for the time saved
doing a particular job.
5.Time rate: this is a wage system that is based on the
number of hours an employee puts in per day.

TERMINOLOGIES
1.PAYSLIP: This is also called a pay advice. It’s a document
which shows detailed information about a particular
employee’s wage or salary. A payslip is usually a small
piece of paper which must be given to each employee
who has been paid.
2.DISHONOURED CHEQUE: This is a cheque which a bank
refuses to pay money for. A bank dishonors a cheque
due to: (a) fake cheque (b) insufficient funds(c) stale
cheque (d) wrong signature.
3.IMPREST ACCOUNT: This is an effective way of keeping
records of payment made for minor expenses.
4.THE STORE: A store is a place or room where goods are
kept until they’re needed. A store is also called a
warehouse. The goods kept on a store are called STOCK
or INVENTORY.
5.STORE RECORDS: These are documents which are used
to determine the current state of stock.
6.STOCK CARD: This is a store record that shows the
movement of goods in and out of the store. It shows
the quantity of goods received, issued and balance at
hand.
7.STOCK REQUISITION FORM: This document is used to
request for goods from the store.
8.STOCK ORDER FORM: This document is prepared by the
storekeeper to ask the purchasing department to place
an order for some stock. When stock is running low the
storekeeper sends this document to the purchasing
officer for action.
9.GATE PASS: This is a document that accompanies goods
out of the store and out of the organization. The
security officers at the gate check the goods that are
taken out of the company.
 10. STOCKTAKING: This is the physical counting of items
in a store or warehouse. The actual quantity of items
must be compared with the records.
11. STOCK CONTROL: This is the proper regulation and
monitoring of the movement and usage of items in a
store or warehouse.
12. DELIVERY NOTE: When goods are sent to another
organization, a delivery note must be given to the driver
or transporter. It contains detailed information about
the goods being carried.
ASSIGNMENT
Give five differences between wages and salaries.