New petty cash procedures cashier services mesa community. 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. Policy the department head is ultimately responsible for the basic safety and control of the cash fund, regardless of who actually handles the transactions, and reimbursements. Petty cash procedure guide california state university. The appropriate balance sheet account will be provided by the accounting office. Below is the key information that should be included in your petty cash policy and procedures. Petty cash fund procedures petty cash fund definition a small cash fund used to make incidental purchases where normal purchasing methods are not practical. This policy establishes the proper uses and administration of petty cash funds. When cash becomes depleted, a refund check should be requested by the petty cash custodian to accounts payable.
Example of petty cash procedures for accounting manual. Size of a petty cash fund the petty cash fund should be small enough to require. Once you have the basics covered, you need to put money into petty cash. A cash handling unit is defined as any department making a minimum of two or more deposits per month. Proper documentation consists of a prenumbered petty cash slip and a receipt from a thirdparty vendor. Because of its accessibility, petty cash funds tend to be susceptible to abuse and misuse. This involves summarizing all disbursements made and issuing cash back to the fund for that amount. All petty cash funds are subject to periodic audits. Petty cash procedure sop policies and procedures manual. Only one petty cash voucher per account number can be taken out at any given time.
Accounting and procedures for petty cash accounting. Petty cash departments needing to provide change, or reimbursements should request a petty cash fund from general accounting. The bursar is the universitys primary handling agent. Petty cash funds should not be comingled with other funds. When cash becomes depleted, a refund check should be requested by the petty cash custodian to. The collection and control of cash at northwestern university are very important functions.
At least once per year, departments must reexamine whether the petty cash account is still required to meet the departments business needs, or if. You should write a check to the custodian to initially establish the fund. All petty cash vouchers must be preapproved and issued prior to purchasing goods. The petty cash procedure helps outline the disbursement and reimbursement of petty cash. Sign and date field 12 authorizing authority to approve the setup or changes to the petty cash fund. Accounts payable is responsible for writing checks and paying the companys bills. To facilitate minor business expenses, a petty cash fund will be available to employees.
Procedures for the handling of petty cash are designed to provide accountability for moneys received in accordance with generally accepted standards of internal controls. Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account. The first thing you need to do is document your petty cash procedures and communicate them to all employees. Petty cash procedures example of accounting manual policies. Application for a petty cash fund should be made by means of a memorandum to the director of finance. All other purchases must go through the purchase order process via a requisitionrequest for payment. Smaller or homebased businesses usually require the business owner to complete this function. This business process demonstrates how a department can enter petty cash receipts and add backup documentation. Jun 22, 2019 the disbursement procedure for petty cash is designed to provide sufficient documentation of each expenditure, as well as proof that funds were actually disbursed.
It is important to trust your employees when they would be using the fund but it is also right to take precautions. Also, the cash will need to be counted and the total should match the total at the bottom of the petty cash log. The petty cash disbursement procedure is outlined below. Petty cash custodians are responsible for ensuring that petty cash expenses are appropriate and in accordance with university and local policies, disbursing cash from a petty cash account, documenting expenditures and keeping receipts, reconciling the account quarterly monthly, if sponsored funds are used, replenishing the account, and. Keep petty cash funds in a secure area such as a locked drawer or small safe. Make the amount of petty cash funds available as small as possible. Create strong internal controls to ensure cash sale proceeds are appropriately safeguarded. Terms and condition of use no university petty cash facilities will be issued, or can be used, except in accordance with this policy.
Thebursars office is the liaison for identifying and working with all cash handling units. Through the use of petty cash policies, petty cash funds are used. In the event of theft, the custodian should notify hisher immediate superior as well as the university police. Assign one person to be in charge of petty cash, known as the petty cash custodian. Financial responsibility for these funds resides with the host department. A petty cash fund or custodian may be revoked at the discretion of the finance director. Adequate receipts and documentation must be maintained to support all transactions made from the petty cash fund. Petty cash funds may be established for payment of minor or infrequent expenses where it is. The petty cash fund was established with the goal of minimizing. Petty cash funds policy 3011 general purpose of petty cash funds petty cash is intended for.
Petty cash may be used only for payments to human research subjects and related expenditures only from. Petty cash funds are for the purpose of infrequent or emergency departmental purchases. Review the m75 request of establishment or update of the petty cash fund form and verify the petty cash limit, the purpose of the petty cash fund and plan for safeguarding the petty cash fund. General information the two designations of imprest cash used at the university are petty cash and drawer cash. Purchaseanywhere petty cash trinity property consultants has adopted the purchaseanywhere cashpass visa prepaid cards to facilitate the accounting and. Whenever possible, an individual who does not have access to the petty. Accounting and procedures for petty cash accounting guide.
The petty cash custodian will be notified for pickup and may present the check to the foundation cashier for cash with the proper identification. 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. Idcash eally, from a control perspective, the collection and controlling of cash should be centralized in one location. Purpose and use of petty cash fund the petty cash fund the fund is intended to provid 1. Businesses that maintain petty cash to pay for small, ondemand necessities should implement proper petty cash audit testing procedures to ensure that employees use petty cash for appropriate reasons and properly account for the petty cash as used. Petty cash fund procedures california state polytechnic. Petty cash funds are used primarily for small expenses in the business. The final step is to topup the petty cash to the float amount. Dec 12, 2017 the petty cash fund procedure has been created to provide guidelines for the appropriate establishment, use, and accountability of such funds. The purpose of this document is to outline policy on establishing and managing the asi petty cash fund. Record of petty cash disbursements and request for reimbursement instructions page 2 of 2 rev. Petty cash, cash equivalents, change funds and special cash funds must be used strictly in accordance with the purpose for which they were established and authorized. This procedure applies to all employees of the company.
The petty cash accounting journal template, the cash box, and all petty cash transactions should be maintained by the cashier. A petty cash fund is cash in a secure lock box, which is used for small purchases and maintained by a petty cash custodian. The accountant makes out a check for the total amount requested for reimbursement to the petty cash fund, and charges each indicated expense account number for the individual expense amount. While petty cash is a relatively small amount of money, it can be easily stolen or abused if you dont handle it right.
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. Review memo request for the establishment of a new petty cash float and challenge. Petty cash or cash drawer procedures cornell university. The check amount should be sufficient to handle most cash purchases for the time period you choose, but not so large as to encourage theft. The george washington university petty cash procedures manual last revised september 2014 ss it is the departments responsibility to ensure that the comptrollers office is notified of any changes made to the petty cash fund. The request should identify the petty cash fund custodian and one other employee that is designated as a back up to the custodian. Petty cash fund procedure controller and treasury texas. The procedure for petty cash funding is outlined below complete reconciliation form. Accounting can be done manually or made easier with bookkeeping software and employee expense. Decreasing or closing a petty cash fund when a project director decides that the petty cash fund should be decreased, the amount is returned and deposited with the foundation cashier. Funds must be completely reconciled and accounted for before the controllers office will approve any changes.
Procedures have been established to encourage effective administration and internal control of cash handling operations throughout the university. Petty cash reimbursements should be scheduled in advance by calling the controllers office ext. When petty cash funds are replenished, the total of the replenishment form cannot exceed the full balance of the fund. Provide a full understanding of the related cash handling responsibilities and accountabilities to the units conducting cash sales. The petty cash reconciliationrequest for reimbursement form must be completed and turned into the accountant for replenishment of petty cash funds expended. 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. The petty cash should be reconciled at the end of the month the same way a bank account is reconciled. Petty cash disbursements c17361 accounting manual page 1 tl 79 123098. Petty cash policies and procedures help business owners limit the amount of time they spend on their accounts payable process. Special care must be taken to protect such funds from theft or misuse.
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