The accounts payable staff creates a check made out to the cashier in the amount needed to fund petty cash to its stated limit. Step 4: Go to an ATM, or write a check to petty cash. It may, for instance, not be possible to get receipts for many small items of expenditure. Let’s say you decide on a petty cash float of $200. There is probably more fraud committed with petty cash and floats than any other area of production so the following controls are necessary:-. • Before payments can be made for petty cash expenses they must be supported by documentary The next step is to write a check to petty cash for $200, cash it, and stow it in your cash register or lockbox. When an individual is given a float advance, that person must be made aware that they alone are responsible for accounting for the float. this must be approved by the Line Producer or, if the write off is in the Line Producer’s float, the write off must be approved by someone senior to them in the company or Production Company. It should be prepared by the Assistant Production Accountant and then checked and signed off by the Production Accountant. Business owners may designate an accounting employee to handle the petty cash. A person with a float of £500 can then expect the final £500 due to them (net of tax) to be withheld until the float is accounted for. Another system that may be employed is called the ‘imprest’ system in which a person’s float is always kept at a certain pre-agreed level. This step is needed to track the types of expenditures being made, which can then be charged to various expense accounts. Where it is impossible to obtain the documentation, the individual accounting for the float should write ‘no receipt’ on the document accounting for the petty cash and the Line Producer should initial this item by way of authorisation, The Line Producer’s floats should be authorised by someone senior to them in the company. Check that any per diem, meal or travel allowances paid in excess of HMRC approved limits are taxed where necessary. Disburse funds only for minor business expenses. Disburse cash. Complete voucher. The reason for having a separate float is that it is often difficult to follow Petty Cash rules to the letter during one-off events – and this can seriously disrupt what had been a well run Petty Cash system. Petty cash funds are small amounts of currency and coins kept on hand in the office for making miscellaneous purchases. The recipient of cash should then sign the voucher; this provides proof that the custodian did not fill out the voucher and simply pocket the corresponding amount of cash. The receipts will provide the backup to the petty cash replenishment checks when you need to top up the fund. 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All petty cash expenditure must to supported by documentation (wherever possible by a VAT receipt; VAT cannot be claimed on a credit card slip). Such assets (costumes, props, fridges, computers, chairs) do have a value and should be either sold off at the end of the production or returned to the production company. The Imprest Petty Cash Fund is Replenished . When picking up cash from a bank, what is the company policy on the number of people who have to attend? This voucher should contain the amount disbursed, the type of … Any cash received from sales or other cash receipts must not be used to make petty cash payments. Petty cash is easy to steal, so make sure you protect it: Separate duties, so the person who is recording transactions is different from the person putting the transactions into your accounting system. Safes are given a rating specifying the maximum value of cash to be held in the safe. S.R.O. Best practice requires that one person alone should be authorised to access the safe and that one spare key should be kept off the premises in case the other key is lost. Similarly, per diems or mileage allowances in excess of the Inland Revenue approved sums are taxable. Generally, the following expe… If a disbursement request falls within the petty cash disbursement guidelines, unlock the container in which petty cash is stored. A primary custodian and secondary custodian. Do occasional audits, checking to see that transactions are legitimate. Each fund must have a Custodian approved in writing by their supervisor and the Manager of Academic Resources for their Division or College. Short title and commencement.- (1) These rules may be called the Public Procurement Rules, 2004. These funds are maintained at minimum levels in order to discourage theft and should not exceed the amount necessary to settle small accounts over a one month period. The Production Accountant must ensure that the rating meets the insurance policy requirement. Ensure that cash in hand is reconciled to the accounting records on a regular basis, at least once a week on a small production but more frequently on a larger one. The fund should be enough to cover petty cash expenditures for about a month. • If the petty cashier cannot decide whether or not an item of expense can be paid from petty cash, the item should be referred to the accounts supervisor for a decision. E.g. This policy establishes the proper uses and administration of petty cash funds. If so, personnel should be instructed to submit a hard copy of the spreadsheet with supporting documentation and also to provide an e-mailed version (which the Production Accountant can adjust VAT and other errors on). Payment for labor / services rendered for a short project (1-2 days) (eg. A cash reconciliation should occur at least weekly but on large productions a daily reconciliation may be appropriate. The general ledger accountant records the voucher amounts listed in the petty cash reconciliation form as expense in the general ledger, and then files the form and attached vouchers. The petty cash custodian retains a copy. The initial petty cash journal entry is a debit to the petty cash account and a credit to the cash account. All the incomes and expenses which are practically not possible to settle through a bank need to be settled none other than cash (no barter transaction in a modern economy). Learn how to set up and use petty cash in five steps plus see examples. Petty Cash and Taxes . Cheque requisition example.xls For security reasons, the petty cash fund should be locked at all times when it is not in use. An accounting staff person reviews and approves the form and sends a copy to the accounts payable staff, along with all vouchers referenced on the form. Remittance advice.doc Petty Cash Custodian: The Petty Cash Custodian is responsible for:. Nothing in the guide constitutes legal advice. The petty cash disbursement procedure is outlined below: Screen disbursement requests. PETTY CASH PROCEDURES INTRODUCTION. The procedure for petty cash funding is outlined below: Complete reconciliation form. So, You Want to Work in Production Accounting? The petty cash custodian then disburses petty cash from the fund in exchange for receipts related to whatever the expenditure may be. For security reasons, the petty cash fund should be locked at all times when it is not in use. Number petty cash vouchers consecutively. Minimum Pension Contribution Rates and Qualifying Earnings, The Apprenticeship Levy and Special Purpose Vehicles (SPV), Using the funds in your Apprenticeship Service Account. Unlock petty cash. Cash in hand should regularly be reconciled to the accounting records to ensure that they agree. If there is a receipt for which the person is being reimbursed, staple it to the voucher. The Production Accountant must keep a copy of the float advance sheet and should give a photocopy of it to the recipient. To expedite the purchase of low value items, Administrative Staff are authorized to maintain a petty cash fund. The cashier deposits the check and converts the funds into cash. The appendix to this guide has an example of a template; this version can also be used on Excel, and the VAT calculated automatically. Expense template.xls 432(I)/2004.- In exercise of the powers conferred by section 26 of the Public Procurement Regulatory Authority Ordinance, 2002 (XXII of 2002), the Federal Government is pleased to make the following rules, namely:- 1. When cost reporting, it is important to put monies aside in the relevant cost centre for the costs associated with floats. 1.2 To ensure that all monies allocated to petty cash are fully controlled and accounted for, and maintained in a petty cash box that is adequately safeguarded. The person being reimbursed completes a reimbursement voucher. The Production Accountant should determine what form of petty cash vouchers (PCV) would prove to be most suitable. All cash receipts should be forwarded to the Finance Office separately. The accounts payable staff forwards the petty cash reconciliation form to the general ledger accountant. This service reduces the risk of robbery and nowadays is quite cost effective. There is no journal entry at this point; instead, the cash balance in the petty cash fund continues to decline, while the number of receipts continues to … You should consult a suitably qualified lawyer on any specific legal problem or matter. Petty cash is the money a small business keeps on hand to pay for miscellaneous things. fund that is used for business operations like in giving change or in business travels This dictates how much cash should be replenished when receipts pile up and cash is low. 12. Petty cash transactions provide convenience for small transactions for which issuing a check is unreasonable or unacceptable. The voucher information may come from the petty cash book. The person authorised to access the safe should be made aware that they alone are responsible for the integrity of the safe and its’ contents. It is important that the person who approves petty cash is not the petty cash custodian to avoid incompatible duties. What is the production insurance policy limit for the amount of cash that can be kept in the company premises and does the policy also require that the money is kept in a safe? 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