In addition, the custodian is responsible for maintaining an activity ledger of all receipts and disbursements of petty cash. Assign one person to be in charge of petty cash, known as the petty cash custodian. Carrying on with our accounting question blog series, this week were focusing on petty cash primarily what it is, the main procedure behind it, and how you can use clear books to record your expenditure what is petty cash. A petty cash fund is cash in a secure lock box, which is used for small purchases and maintained by a petty cash custodian. Mar 01, 2016 petty cash is usually the mechanism of last resort to access cash for payments, when other disbursement methods are impractical or cannot be used. Petty cash policy northeast ohio regional sewer district.
Petty cash disbursements should only be used for small incidental expenditures and not as a method to bypass the districts accounts payable and purchasing system. Petty cash is a small amount of cash that any business can keep on their premises in a lockable container. The purpose of this policy is to establish procedures for petty cash funds and the custody of those funds. Review procedures on establishing and managing petty cash fund that is governed by policy 119. Petty cash procedures example of accounting manual policies. Petty cash fund procedures murray state university. Flowchart you can edit this template and create your own diagram. The date on the receipt must be on or after the petty cash voucher issue date.
Petty cash floats should never be used to circumvent normal. Petty cash process disbursements wayne state university. Accounting and procedures for petty cash accounting guide. Best practices for cash control the procedures listed below are the best practices to accept, store, reconcile and deposit, document, and transport deposits, for cash, checks and payment cards. All petty cash vouchers must be preapproved and issued prior to purchasing goods. No matter what type of business youre in and no matter what you use your petty cash for, following these two principles along with some simple budgeting procedures will keep your. Petty cash process editable flowchart template on creately. Example of petty cash procedures for accounting manual. Petty cash funds provide cash to units and departments to cover minor expenses, such as reimbursement of staff. All cash receipts should be forwarded to the finance office separately. The recipient of cash should then sign the voucher.
There might be a petty cash drawer or box in each department for. The petty cash system is part of a companys internal control procedures. Fund custodians are encouraged to complete the online petty cash training see additional resources. Petty cash should be properly controlled with a petty cash log and accurately entered into the bookkeeping system in exactly the same way you would maintain a bank account. These funds should be used only when cash is the most cost efficient method of payment. This includes advancing cash from a petty cash fund for purchases.
All refunds must be processed through appropriate procedures as established by the controllers office, depending upon the type of transaction involved. Petty cash and change funds should not be deposited into a bank account, including the personal bank account of the petty cash custodian. Petty cash procedures guide arizona state university. Accounts payable will confirm with the petty cash custodian once the packet is processed. Creately diagrams can be exported and added to word, ppt powerpoint, excel, visio or any other document. Store all completed vouchers in the petty cash box.
The petty cash custodian is responsible for the day to day maintenance of the petty cash fund, including. Accounting can be done manually or made easier with bookkeeping software and employee expense. This policy establishes the proper uses and administration of petty cash funds. To only dispense petty cash upon submission of original vendor receipts and ensure these receipts reconcile to and fully support apetty cash record of expenditures. Petty cash policy example accounting forms cash funds. Make the amount of petty cash funds available as small as possible. Petty cash cash drawer fund controls and procedures are to ensure that petty cash cash drawer funds are properly established, maintained and that university assets are adequately safeguarded. Use pdf export for high quality prints and svg export for large sharp images or embed your diagrams anywhere with the creately viewer. Petty cash procedure guide statement this policy establishes the proper uses and administration of petty cash funds. Dec 12, 2017 refunds cannot be made directly through the use of petty cash funds, change funds, nor funds received from cash receipts unless specifically authorized by the controller. Departments should read fin 403 before establishing a petty cash fund. These should be processed through the special servicespayroll process.
Because of its accessibility, petty cash funds tend to be susceptible to abuse and misuse. Maintaining a petty cash fund is 90 percent record keeping. All petty cash payments must be made from the petty cash float only. Purchases which are required to be reported in a specific manner such as, but not limited to, personnel services, travel expenses, payroll advances, and business meals. Safeguarding, reconciling, and replenishing the fund, counting and reconciling petty cash funds at least monthly so that shortages or other discrepancies can be noticed, reported, and corrected in a timely basis. Clearing any type of cash advance requires proper documentation andor repayment of unused funds.
Petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. Added guidance for when to use a petty cash account for human subject payments versus when to use a shortterm operating advance stoa. Below is the key information that should be included in your petty cash policy and procedures. Additionally, the request should indicate the account to be charged and be approved by the appropriate department manager or designee who is neither the fund custodian nor an employee reporting to the fund. Petty cashchange fund reconciliation cash on hand currency 1. There is a limit of 50 on any one item claimed unless otherwise authorised by the finance office. Petty cash procedures guide this guide serves as a supplement to the policy outlined in fin 403.
Sep 19, 2019 petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. The guide also identifies and defines individuals other than the custodian who are. Terms and condition of use no university petty cash facilities will be issued, or can be used, except in accordance with this policy. The foundation requires each petty cash fund to have an approved custodian, who documents expenditures, keeps receipts, and safeguards the funds. The working fund custodian oversees all of the universitys petty cash funds. Petty cash fund procedure controller and treasury texas.
At a minimum, the purchasing and disbursements managerdesignee will reimburse petty cash in the authorized amount by the close of each fiscal month. As a custodian of petty cash funds you have assumed and accepted responsibility for the safekeeping of. Prior to requesting the establishment of a petty cash fund, the responsible. Petty cash policy and procedures coppin state university. Accounting and procedures for petty cash accounting. Travel expenses consulting or professional services awards contracts steps to take for petty cash reimbursement a reimbursement form from petty cash requires the submission of a petty cash voucher from the business office. No matter what type of business youre in and no matter what you use your petty cash for, following these two principles along with some simple budgeting procedures will keep your petty cash fund balanced. The petty cash fund was established with the goal of minimizing.
Policy on petty cash south african qualifications authority. This involves summarizing all disbursements made and issuing cash back to the fund for that amount. Petty cash box must be kept in a secure environment. Petty cash can sometimes be used in place of charge card purchasing. Petty cash policies and procedures do not use petty cash for. This reference guide is intended to assist custodians with daily petty cash operations. Petty cash funds may be established for payment of minor or infrequent expenses where it is.
Petty cash funds must not to be used as an operating fund, i. As petty cash transactions must be recorded each month in the universitys general ledger the petty cash monthly returns appendix 3 are to be. The first thing you need to do is document your petty cash procedures and communicate them to all employees. The custodians should balance the fund each day to ensure that the available cash and the approved.
All petty cash custodians must sign and acknowledge that they understand the universitys petty cash policies and procedures. Tub financial deans or equivalent tub financial officers or designees are responsible for ensuring that local units abide by this policy and the accompanying procedures, and for approving petty cash action forms tubs are responsible for approving payment requests submitted to fund new petty cash accounts before the request is routed to central administration for final approval. Funds must be completely reconciled and accounted for before the controllers office will approve any changes. Drawer cash drawer funds are established for the sole purpose of making change for student payments or customer sales. Each petty cash voucher must be countersigned or authorised by the relevant line manager. New petty cash procedures cashier services mesa community. Petty cash funds are used primarily for small expenses in the business.
Petty cash floats are available to facilities where they require access to a small amount of cash to cover minimal sundry goodsservices which due to their inexpensive nature, are more costly and timely to purchase via normal procurement procedures. Any cash received from sales or other cash receipts must not be used to make petty cash payments. To facilitate minor business expenses, a petty cash fund will be available to employees. The use of a university petty cash facility is governed by the. Petty cash may not be used for entertainment expenses. When petty cash is no longer needed for a department the fund should be closed by reimbursing the fund as outlined above and then the account should then be returned to accounting providing a credit back to the original account withdrawn from. Initiation of a petty cash fund department written request to the controller stating reasons the fund is needed. It is important to trust your employees when they would be using the fund but it is also right to take precautions. When cash is added to a petty cash fund, the basic concept is to replace the amount of any cash that had previously been disbursed from the fund. Disbursements from petty cash funds must be properly documented and for a valid university business purpose.
Petty cash funds may not be used for the following. When you set up a petty cash fund, you provide a way to cover some unexpected work expenses incurred by your employees or your business. Only one petty cash voucher per account number can be taken out at any given time. The petty cash account shall be replenished as needed.
Through the use of petty cash policies, petty cash funds are used. Review memo request for the establishment of a new petty cash float and challenge. Procedures for the handling of petty cash are designed to provide accountability for moneys received in accordance with generally accepted standards of internal controls. Record of petty cash disbursements and request for reimbursement instructions page 2 of 2 rev. Count the cash being disbursed, and have the recipient count it as well, to verify the amount being paid. Petty cash funds consist of money kept on hand by departments to be used for. All petty cash funds are subject to periodic audits. Pettycash funds are to be maintained on an imprest basis. Individual reimbursement for petty cash expenditures may be obtained by submitting a properly prepared petty. The other 10 percent is controlling who is allowed to access the funds. Receipts must accompany the check to reimburse the petty cash fund, and must total the amount of the check. Petty cash procedure guide california state university. The petty cash procedure helps outline the disbursement and reimbursement of petty cash. Petty cash is usually the mechanism of last resort to access cash for payments, when other disbursement methods are impractical or cannot be used.
If your business is currently using accounting software like clear books, then you can easily record all your money expenditure by simply setting up a petty cash account in the clear books accounting application. Request for a petty cash fund must be completed via a requisition in oracle. Payments to employees for services, awards, bonuses, etc. When cash is removed from the box, a voucher is filled out for the exact amount of cash and signed by the person removing the cash. Petty cashcash drawer fund controls and procedures are to ensure that petty cashcash drawer funds are properly established, maintained and that university assets are adequately safeguarded. Petty cash policy purpose the purpose of this policy is to provide users with detailed procedures regarding the establishment and administration of a departmental petty cash fund. Ref guide petty cash 0408 perelman school of medicine.
Petty cash procedure sop policies and procedures manual. Petty cash can be used to reimburse individuals for nontravel, outofpocket expenditures. Petty cash or cash drawer procedures cornell university. The use of petty cash funds is subject to university audit, and therefore the custodian is responsible for the proper disbursement of the funds, receipting, and record keeping according to university requirements. Use of the petty cash fund is not meant to circumvent purchasing procedures. Employees may take money from the fund to cover a cost or receive reimbursement for expenses they already paid, depending on what system you prefer. The request should identify the petty cash fund custodian and one other employee that is designated as a back up to the custodian. The day to day maintenance of the petty cash fund, including. Petty cash, in simple terms, is an amount of money that a business has available to pay for something inexpensive, so an employee doesnt have to use. A petty cash log is a document to record all the important financial information. Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account.
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