Replenish A Petty Cash Fund

replenishing the petty cash fund requires

Purpose and Background Petty cash funds provide a useful and inexpensive way to make prompt cash payments for minor business expenses. By establishing a petty cash fund, a department or unit which normally incurs a large volume of minor expenses may realize a significant reduction in administrative work. In addition, payees will receive payment faster and employees may no longer walk to the campus Cashier/Bursar for reimbursement. For these reasons, departments are encouraged to establish petty cash funds where there is demonstrated need. Imprest petty cash funds placed in the custody of responsible employees thus serve to maintain control over cash without burdensome procedures for small disbursements. When the fund requires more cash or at the end of an accounting period, the petty cash custodian requests a check for the difference between the cash on hand and the total assigned to the fund. At this time, the person who provides cash to the custodian should examine the vouchers to verify their legitimacy.

Increasingly, these slips are electronic ones, entered in a digital spreadsheet or ledger. But it can be helpful to keep paper slips too, along with receipts from the purchases or payments .

University Policies

Companies usually replenish the petty cash fund either when it becomes low or at the end of the accounting period. In the latter case, companies do this so that there is no record of the fund expenses in the accounts until the check is issued and a journal entry is made. To find out which accounts to debit, the custodian consolidates the petty cash vouchers and summarizes the reasons for expenditure. See Procedure 4-004, Preparation of Cash Fund Request, for detailed instructions and requirements. The amount of the petty cash fund is not charged to the department’s budget.

These errors cause the cash in the fund to be more or less than what the amount of the fund should be. When the fund is replenished, the amount to be credited to the fund is the difference between the actual cash in the fund and the established amount. On the back of the receipt, write the person’s name and the account from the chart of accounts to which you will charge the purchase. Some companies use a voucher system, which essentially works the same way as the log. Some departments find it necessary to establish a Petty Cash Account to pay for small expenditures where vendors will not allow merchandise to be charged to the University.

How To Adjust Supply Expenses

Once a petty cash fund has been approved, a check will be prepared by the Business Office for the approved amount. The check must be picked up in the Business Office by the account custodian. The top portion of the Custodial Record must be completed by the custodian. A petty cash fund is established for the payment of small (less than $10) charges or for non recurring charges, such as freight.

replenishing the petty cash fund requires

To transfer custodial responsibility on a departmental cash fund, the department should contact the Controller’s Office before the change in custodian. Documenting disbursements and reimbursements – Written or printed receipts or „paid” invoices must be maintained to support each transfer of funds . Expenditures must meet the legal requirements attached to the source of university funds used to establish the cash fund. This policy is applicable to every university department, administrative office, and affiliated/related organizations involved in handling university cash. Employees with any type of cash handling function are expected to be familiar with the requirements of this policy. Vendor receipts should show the date, amount and description of the purchases. If a receipt could not be provided or was lost, the purchaser must complete a “Missing Receipt Affidavit Form” in lieu of a receipt with appropriate date, amount, and description/reason for expenditure.

Policy Statement

The remainder of the loss may be reimbursed to the department by the Risk Management Department, upon notification from Internal Auditing. All change funds must be maintained in a locked cash box and when not in use shall be kept in a secure place, preferably a fireproof safe, to prevent loss. Any further questions regarding security should be directed to Public Safety, Investigations Division. To close a change fund, the change fund must be returned to the Business Office. If a shortage exists, a Payment Order will be prepared charging the departmental budget for the shortage. If an overage condition exists, an entry will be made crediting University Miscellaneous Income. The bottom portion of the Custodial Record shall be completed by the custodian.

Sometimes, the petty cash custodian makes errors in making change from the fund or doesn’t receive correct amounts back from users. These errors cause the cash in the fund to be more or less than the amount of the fund less the total vouchers. When the fund is replenished, the credit to Cash is for the difference between the established amount and the actual cash in the fund.

Financial Accounting

Each specialized petty cash fund must be reconciled no less than once a month. Petty cash funds are subject to unannounced verifications by management of the responsible department, the State auditor, the Internal Audit Department, and/or the Controller’s Office. At the time of the audit, the petty cash custodian must provide a full accounting of the fund. The money in the change fund has been commingled with personal funds, petty cash funds, and/or BGSU Foundation funds. The custodian shall maintain a permanent, continuous ledger documenting every expenditure made and every reimbursement received from the Business Office. This ledger will allow easy determination of cash on hand and the amount of expenditures not yet reimbursed by the Business Office. The sum of these two amounts shall equal the authorized amount of the petty cash fund.

replenishing the petty cash fund requires

If the remaining balance is less than what it should be, there is a shortage. If the remaining balance is more than what it should be, there is an overage.

Received Of Petty Cash

We will walk through the creation of a trading account, profit and loss account, and balance sheet. If the Controller grants approval, Controller’s Office replenishing the petty cash fund requires personnel prepare a check for the specified amount. Name and account code of the department which will assume responsibility for the expenditures.

  • Departmental Change Funds may not be used to cash checks or to make loans or advances.
  • Contact Accounts Payable immediately if advances are not resolved fully within 4 days.
  • At this time, the total of all of the receipts is calculated to ensure that it matches the disbursed funds from the petty cash drawer.
  • To replenish the Petty Cash Find, complete the Petty Cash Replenishment Form .
  • Arrange original receipts in chronological order and by type.
  • To close a change fund, the change fund must be returned to the Business Office.
  • Check requests are processed by Supply Chain Management Accounts Payable and may require additional processing time.

The petty cash fund must be in the custody of one person who will assume the operating responsibilities of the fund including safeguarding and reconciling the fund. Establishing and authorizing banking accounts to be used for university funds. Custodians are required to maintain appropriate records and verify the cash fund on a daily, weekly, or monthly basis, depending upon the amount of activity involved and the dollar amount of the fund. The Petty Cash Reconciliation Log offers the recommended format for performing the reconciliation. The cash fund may not be used to circumvent university policies and procedures. Once the training is complete, the New petty cash custodian must complete a “Petty Cash Action Form”.

Purchases of goods and services for more than $100 should not be made with petty cash. Purchases over $100 should be made using other procurement methods such as the purchasing card. Reimbursement requests must be signed by the custodian of record and the Principal Investigator or Account Executive . The change fund has not been properly registered with the Business Office. Information related to the security of funds should be directed to Public Safety, Investigations Division.

For a description of till cash funds see BPPM 30.51. Purchases of goods and services for the personal use of faculty or staff members. If this information is not provided by the vendor on the receipt, then the purchaser should note this information on the face of the receipt. Arrange original receipts in chronological order and by type.

Replenishment Of Funds

Adding machine tapes and scrap pieces of paper will NOT be accepted as proper documentation. Limiting access to funds – Access to petty cash funds must be limited to the person responsible for the fund. Cashier Services must review all petty cash funds prior to the close of the fiscal year. Treasury Services may, at its discretion, close a specialized petty cash fund in the event of mismanagement, misuse of funds or other violation of this policy. The documentation requirements for petty cash reimbursements are the same for reimbursements processed through Accounts Payable.

replenishing the petty cash fund requires

Maintaining receipts and detailed records to support all transactions. New custodian should read the policies and procedures prior to accepting the responsibilities of custodianship for a fund. Petty cash replenishment less than $300 is processed through the Cashier’s Office window. To replenish the Petty Cash Find, complete the Petty Cash Replenishment Form .

What is automatic replenishment?

a computerised system that analyses inventory levels and lead times and re-orders stock to meet forecast sales needs.

Any individual handling university cash is responsible for proper security and accountability. Only authorized employees may handle monies for university business.

  • However, the availability of petty cash doesn’t mean that it can be accessed for any purpose by any person.
  • Companies often use petty cash to make change for customers and pay for small, unexpected expenses such as office supplies or a small repair.
  • Campus Police Department can also inspect and recommend security measures for departments that handle cash.
  • Please note the sales receipt should always include the vendor’s name.
  • Name and account code of the department which will assume responsibility for the expenditures.
  • If a shortage exists, a Payment Order will be prepared charging the departmental budget for the shortage.

Affix them to 8 1/2 x 11-inch white paper using clear tape . An on-going ledger of receipts and disbursements has not been maintained. Harold Averkamp has worked as a university accounting instructor, accountant, and consultant for more than 25 years. He is the sole author of all the materials on AccountingCoach.com. When a requisition and purchase order has not been created. Tape the original receipts to a blank piece of paper. Complete theTransfer of Petty Cash/Cash in Drawer Fund Accountability Form.

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