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B.2. Cash Items in Process on Collection (CIPC)

B.2. Cash Items in Process on Collection (CIPC) . Julie Powell, Business Specialist 216/579-2085. CIPC. Why are assets collected on a deposits report? Give credit when credit is given Reduce reservable liabilities. CIPC. What is a cash item? True or False __ A U.S. ten dollar bill?

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B.2. Cash Items in Process on Collection (CIPC)

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  1. B.2.Cash Items in Process on Collection (CIPC) Julie Powell, Business Specialist 216/579-2085

  2. CIPC • Why are assets collected on a deposits report? • Give credit when credit is given • Reduce reservable liabilities

  3. CIPC • What is a cash item? True or False __ A U.S. ten dollar bill? __ The most abused item on the FR 2900? __ Checks written against your depository institution?

  4. CIPC • What is a cash item? True or False _F_ A U.S. ten dollar bill? _T_ The most abused item on the FR 2900? _F_ Checks written against your depository institution?

  5. CIPC What are includable items • Checks written on other DIs that have not been paid • Unpaid checks drawn on the Treasury • Checks that will be forwarded for collection on the next business day • Others (money orders, travelers checks, food coupons) • Returned Items – define • Unposted debits – define

  6. CIPC • Returned Items • Items drawn on another depository • Some irregularity or defect • May cause a loss to the returning depository • Exclude • Checks or drafts returned for insufficient funds

  7. CIPC What are unposted debits • “Cash items” that have been paid or credited but have NOT been charged against deposits • Are includable until charged against deposits

  8. CIPC What is float and how do you deal with it? • A check written on another depository • Where the depositor has been given credit • But the check has not been paid You have given credit but not received credit

  9. CIPC • There are a variety of schedules used by those who clear checks: • Immediate credit – careful how immediate is it? • Deferred credit – for how long? • Let’s calculate

  10. Check Check The funds are sent to your bank A customer makes a deposit The check is written on another bank You send the check to the FRB for clearing The bank sends funds to the FRB to cover the check

  11. When would float begin?

  12. The day you credit the deposit When would float begin?

  13. When would float end?

  14. The day you receive credit When would float end?

  15. What would happen to your float calculation if the FRB gave you immediate credit?

  16. Immediate credit is usually the next business day – research your vendors process – still 1 day of float.

  17. CIPC Exercise

  18. Only this balance will be available on the next business day

  19. 11/4 11/3 11/2 11/1 Only this balance will be available on the next business day

  20. Your Turn

  21. CIPC • Common report errors • Teller outages • NSF returns • Suspense accounts • Other Assets • Reporting zero or negative balances • Legitimate differences will be covered with Vault Cash

  22. CIPC Questions?

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