FNSICGEN305B Maintain daily financial/business records Petty Cash
Petty Cash General Information
All businesses within Australia are required to bank their takings intact. If a bill needs to be paid, then a cheque is written, Credit card is used or there is a transfer or BPAY via the internet where a receipt is given.
However, for small amounts, such as a taxi fare, milk for morning tea, a cheque would not be written. A petty cash system would be setup.
The IMPREST SYSTEM has been in use for many years, where a small (or petty) amount is transferred from the bank account into another account for immediate use. The Imprest amount is an ASSET – something of value the business owns, as it has not been spent.
An imprest cheque is written for cash, a coinage analysis is also completed. The cash collected from the bank is placed in a locked drawer or tin. Only one person should have access to this money and be responsible for it – although a second person would be trained and used to audit or check the money.
Staff would need to be trained according to Company Policy Guidelines for use of Petty Cash. (see Petty Cash Guidelines p 4) Vouchers and a Petty Cash book need to be purchased or produced on the computer or a template setup in Excel.
Once this is in place, advances can be given to staff, so that they are able to purchase items necessary for the running of the business. Receipts (handwritten, Cash Register) must be produced before staff can finalise the advance or claim for items purchased.
In a large business (where Imprest cheque amounts would be over $3000.00) the petty cash book would be written up daily. Some smaller businesses write these up once a week or even monthly.
At any time the vouchers in the Petty Cash Tin and the cash must equal the imprest amount.
Petty Cash Procedure
1 Decide on the amount to be deposited in the Petty Cash Fund.
2 Complete a cheque requisition, then write cheque to open fund (Imprest cheque).
3 Prepare a cash analysis—change docket.
4 Go to bank and get the cash, place in secure, locked tin or drawer—enter in the Petty Cash Book.
5 Issue staff with memo re policies and procedures for using petty cash. Who will authorize the expenditure?
6 Cashier is now able to refund petty cash receipts (cash dockets required as proof of expenditure) or give an Advance for petty cash use.
7 Fill in Petty Cash Vouchers (watch the GST).
8 Write up the Petty Cash Book.
9 Balance when funds are low or at regular intervals, but always at end of month.
10 Complete a cheque requisition then write out the Reimbursement Cheque. Prepare a cash analysis—change docket. (If not using a cheque requisition, write dissection of funds on cheque butt.)
11 Go to bank and get the cash, count and place in secure, locked tin or drawer—enter in the Petty Cash Book.
Petty Cash Guidelines
Follow Company Procedures (from the Procedure Manual) for all Petty Cash Transactions. For example,
" All claims must be work-related and approved by your current supervisor.
" Claims must be made within 14 days of expenditure.
" No expense claims of over $35.00 per day allowed. (This will vary with each company).
" No staff meals or dry cleaning will be claimed.
" Staff Amenities – coffee, tea, milk and biscuits are claimable.
" Reimburse your funds at the end of each month and/or when funds are low.
PETTY CASH – CHEQUE REQUISITION
In large businesses, to make sure all cheques are accounted for and authorized – you would need to fill out a CHEQUE REQUISITION, attach the used vouchers to enable the accountant to check and prove the amounts. The accountant would then sign the REIMBURSED CHEQUE (or IMPREST or both).
CHEQUE REQUISITIONPAYEE: / DATE REQUIRED:
Details of accounts and amounts to be Debited:
Petty Cash Reimbursement
Stationery
Postage
Travel Expenses / Sundry Expenses
Staff Amenities / GST Paid
Cheque No Issued: / Cheque Total:
Issued by: / Requested by:
Faculty of Business and Computing Page 1 of 5
Business Administration 13 August 2009
FNSICGEN305B Maintain daily financial/business records Petty Cash
Example of a Petty Cash Book
Petty Cash Book of Page No 1
Amount Received / Date / Details / Ref No / Amount Paid / Stationery / Postage / Travel / Staff Amenities / Sundry Expenses / GST Paid150 / 00 / Apr 01 / Imprest / CHQ 111555
02 / Taxi Fare / 36 / 20 / 35 / 18 / 50 / 1 / 85
04 / Milk, Biscuits / 37 / 8 / 80 / 8 / 25 / 555
09 / Stamps, parcel / 38 / 13 / 75 / 12 / 50 / 1 / 25
Pens, Paper clips / 39 / 17 / 60 / 16 / 00 / 1 / 60
10 / Dishwashing liquid etc / 40 / 24 / 20 / 22 / 00 / 2 / 20
Parcel, Courier / 41 / 17 / 60 / 16 / 00 / 1 / 60
102 / 30 / 16 / 00 / 28 / 50 / 18 / 50 / 8 / 25 / 22 / 00 / 9 / 05
Balance c/d / 47 / 70
150 / 00 / 150 / 00
47 / 70 / Apr 10 / Balance b/d
102 / 30 / Reimbursement / CHQ 111666
Faculty of Business and Computing Page 1 of 5
Business Administration 13 August 2009
FNSICGEN305B Maintain daily financial/business records Petty Cash
Petty Cash Discussion Points – what would you do in these situations?
1 Naomi is making frequent and excessive claims for taxi fares.
2 Ray has asked for reimbursement of the cost of a desk organiser, but has failed to produce a receipt.
3 Toby waits until he has several expenses before lodging a claim. By then, quite a large sum is involved and reimbursing him severely depletes your balance.
4 Arthur brings the petty cash docket to you without first having it signed by the authorising officer.
5 Lee is asking for a refund for the cost of flowers for her desk.
6 Jane is frequently short of money and on several occasions has asked you to let her borrow from the petty cash fund.
As you work through the pack, answer the following questions:
1 What is the name of the first cheque, which is used to open or establish a Petty Cash System?
2 What does balance b/d mean? What does balance c/d mean?
3 If the imprest cheque was $200, you spent $195.50 and you decided to increase the Imprest amount to $250, what amount would you write out on the cheque?
4 If you are just completing page 2 of the Petty cash book and getting ready to start page 3 – how would you complete page 2 and what would you do at the top of page 3?
5 When must you reimburse the petty cash system?
6 Would you write up a cancelled voucher into the petty cash book?
Faculty of Business and Computing Page 1 of 5
Business Administration 13 August 2009