Are there any special procedures for managing non-petty cash?
What are the procedures used in handling a petty cash transaction?
The procedure for petty cash funding is outlined below:
- Complete reconciliation form. Complete a petty cash reconciliation form, in which the petty cash custodian lists the remaining cash on hand, vouchers issued, and any overage or underage. …
- Obtain cash. …
- Add cash to petty cash fund. …
- Record vouchers in general ledger.
How can you manage petty cash?
How to set up a petty cash management system
- Appoint someone as petty cash custodian. Only one person at a time should be given responsible for the fund. …
- Fund the account. …
- Secure the funds. …
- Establish policies. …
- Record disbursements. …
- Require receipts. …
- Replenish funds when low. …
- Monitor spending.
What is the most important internal control over petty cash?
Bookkeeping Interface. Your petty cash system should be integrated with your overall bookkeeping system to keep an internal control on the way money flows within your business. Cash a business check each time you replenish the fund to document the transfer of funds from your general bank account to your petty cash fund …
What are the two methods in accounting for petty cash fund?
Forms used for Operating Petty Cash Fund
The petty cash fund can be operated in the two ways: ordinary and imprest system of petty cash fund.
How do you audit a petty cash procedure?
How to Audit Petty Cash
- Meet the person who serves as the normal custodian of the petty cash — usually a secretary or manager. …
- Count the currency and coin. …
- Sum all the vouchers and receipts used to justify payments from petty cash or records of transactions adding to the cash. …
- Add the cash total to the voucher total.
What is a petty cash policy?
This policy provides guidance for the authorization, establishment and replenishment of Petty Cash Funds, including appropriate uses and security standards. The purpose of a Petty Cash Fund is to allow for the reimbursement of necessary and reasonable minor business expenses in an efficient and cost effective manner.
How is petty cash monitored?
The most common accountancy approach used to manage petty cash is the ‘imprest’ system. This involves an employee being given the role of ‘custodian’ and made responsible for managing the petty cash. The cash is usually kept in a money box within the office.
Who should manage petty cash?
Typically, one employee is responsible for controlling petty cash funds. This person is known as the petty cash custodian. The custodian will maintain and document all expenses from the petty cash. By giving this responsibility to one custodian, it means that you will retain internal control over the money.
What happens when petty cash doesn’t balance?
Write a check to cash for the money you need to restore the original balance. If the combined total equaled the original balance, write the check for the Total Withdrawals amount. If there’s a shortage, add the Total Withdrawals and Cash Short and write the check for the total.
What would you do if there was a discrepancy in your petty cash book?
Investigate any differences between the stated amount of the petty cash fund and the actual total of cash and vouchers. If the difference is unexplained, complete a voucher stating the unexplained amount, and charge it to a predetermined departmental account in the general ledger.