Accounting for Cash on Delivery via Postal Money Order

What is the difference between cash on delivery and cash on delivery with a postal money transfer, and when does the obligation to issue a fiscal till receipt arise?

The Postal Services Act provides a definition of the term ”cash on delivery”

Pursuant to §1, item 12 of the Additional Provisions of Ordinance No. N-18 of the Ministry of Finance of 13.12.2006

“cash on delivery” is a postal service whereby the postal item is delivered to the recipient against payment of an amount specified by the sender.

The supplier of the goods hands them over to the courier, who in turn is obliged to deliver them to an address specified by the customer and is obliged to collect the amount set by the supplier for the delivered goods. The courier collects the amount set by the supplier. Subsequently, depending on the contract concluded between the courier company and the supplier, the courier either pays the collected amount to the sender in cash or transfers it to him by bank transfer.

The way in which the courier pays the amount to the sender has nothing to do with the way in which the recipient of the goods pays their value. In both cases the customer pays the amount to the courier in cash, i.e. at the moment the goods are handed over by the courier to the recipient, the payment covering their value leaves the company’s cash desk.

The way in which the courier pays the collected amount to the sender is decisive when it comes to complying with the legal requirements for issuing a fiscal receipt

Pursuant to Art. 118, para. 1 of the VAT Act, every person registered or not registered under this Act is obliged to register and account for the supplies/sales made by him at a commercial outlet by issuing afiscal receipt from a fiscal device (fiscal voucher) or by issuing a receipt from an integrated automated system for the management of commercial activity (system voucher), regardless of whether another tax document has been requested. The recipient is obliged to receive the fiscal or system voucher and to keep it until leaving the outlet.

Ordinance No. N-18 of the Ministry of Finance of 13.12.2006 sets out the procedure and manner for registering and accounting for sales at commercial outlets by means of fiscal devices.

Art. 3 (1) of Ordinance No. N-18 states that every person is obliged to register and account for the sales of goods or services made by him at or from a commercial outlet by issuing a fiscal receipt from a fiscal device or a receipt from an IASMCA, except where the payment is made by depositing cash into a payment account, credit transfer, direct debit or a cash money transfer carried out through a payment service provider within the meaning of the Payment Services and Payment Systems Act, or by a postal money order carried out through a postal operator licensed to provide postal money order services within the meaning of the Postal Services Act.

The provision of Art. 25, para. 1, item 1 of the Ordinance states that, irrespective of documentation by a primary accounting document, a fiscal receipt from a fiscal device or a receipt from an IASMCA must be issued for every sale by the persons under Art. 3, para. 1 – for every payment with the exception of cases where the payment is made by depositing cash into a payment account, credit transfer, direct debit, by a cash money transfer or a postal money order under Art. 3, para. 1.

or …. where the owner of an online shop has concluded a contract with the courier company for cash on delivery by postal money order:

1. For the payment made by the customer, the courier company issues a postal money order receipt for the value of the amount due. This receipt is a document recognised by law which releases the trader from the obligation to issue a cash register receipt, as it serves that role.

2. The receipt is given to the customer after he has paid the amount to the courier in cash, and the sender receives a copy of it. The customer should attach the postal money order receipt to the purchase invoices issued, on the basis of which to record his liability as paid in cash.

3. The amount collected by the courier from your customers is transferred by the courier company to the trader’s bank account.

It should be noted that all of this is possible, and the issuing of a fiscal receipt is not required in the presence of a contract for cash on delivery by postal money order, solely and only if the courier is a licensed postal operator for the provision of postal money order services within the meaning of the Postal Services Act. Econt and Speedy are precisely such operators.

The register is published on the website of the Communications Regulation Commission

And so we should draw the conclusion that

1. When the company accepts a payment made in cash by cash on delivery, it has an obligation to register and account for the supplies by issuing a fiscal receipt.

2. When the company has concluded a contract with a courier – a licensed postal operator – for cash on delivery by postal money order, the collected amounts are credited to the company’s bank account and it is not obliged to issue a fiscal receipt. The postal money order receipt issued by the courier upon receiving the amount from the customer serves the role of a cash register receipt.

Legislation used:

Ordinance No. N-18 of the Ministry of Finance of 13.12.2006

§ 1 item1. “delivery trade” is the sale of goods or services outside the commercial outlet upon prior order; the sale of newspapers and magazines for outlets specialised only in newspapers and magazines is also considered delivery trade;

Art. 25. (1) (Suppl. – SG, No. 40 of 2013, in force from 30.04.2013) Irrespective of documentation by a primary accounting document, a fiscal receipt from a fiscal device or a receipt from an IASMCA must be issued for every sale by the persons:
1. (suppl. – SG, No. 49 of 2010, in force from 29.06.2010, amended – SG, No. 48 of 2011, in force from 24.06.2011, amended – SG, No. 102 of 2012, in force from 21.12.2012) under Art. 3, para. 1 – for every payment with the exception of cases where the payment is made by depositing cash into a payment account, credit transfer, direct debit, by a cash money transfer or a postal money order under Art. 3, para. 1;

Art. 25 (2) In delivery trade, the fiscal receipt is issued by the person under Art. 3 and is handed over to the delivery agent, who in turn provides it to the buyer upon payment.

Art. 3. (1) (Suppl. – SG, No. 49 of 2010, in force from 29.06.2010, amended – SG, No. 48 of 2011, in force from 24.06.2011, suppl. – SG, No. 102 of 2012, in force from 21.12.2012, amended – SG, No. 40 of 2013, in force from 30.04.2013) Every person is obliged to register and account for the sales of goods or services made by him at or from a commercial outlet by issuing a fiscal receipt from a fiscal device or a receipt from an IASMCA, except where the payment is made by depositing cash into a payment account, credit transfer, direct debit or a cash money transfer carried out through a payment service provider within the meaning of the Payment Services and Payment Systems Act, or by a postal money order carried out through a postal operator licensed to provide postal money order services within the meaning of the Postal Services Act

Postal Services Act
§1, item 12 of the Additional Provisions “Cash on delivery” is a postal service whereby the postal item is delivered to the recipient against payment of an amount specified by the sender.

§1 item 9. “Postal money orders” are postal services for sending amounts on paper, through the postal offices of a postal operator licensed to provide the services under Art. 39, item 3, from the sender to the recipient.

VAT Act

Art. 118. (1) Every person registered or not registered under this Act is obliged to register and account for the supplies/sales made by him at a commercial outlet by issuing a fiscal receipt from a fiscal device (fiscal voucher) or by issuing a receipt from an integrated automated system for the management of commercial activity (system voucher), regardless of whether another tax document has been requested. The recipient is obliged to receive the fiscal or system voucher and to keep it until leaving the outlet.