7 Simple Steps To Improve Control Over Petty Cash. Count the cash being disbursed, and have the recipient count it as well, to verify the amount being paid. You can lose a tidy sum over time if your controls are inadequate. In a few cases, e.g. 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. This involves summarizing all disbursements made and issuing cash back to the fund for that amount. If a disbursement request falls within the petty cash disbursement guidelines, unlock the container in which petty cash is stored. Disburse funds only for minor business expenses. Disburse funds only for minor business expenses. The petty cash disbursement procedure is outlined below: Screen disbursement requests. Before reimbursing the petty cash fund the person responsible for writing the check should verify all cash and vouchers on hand. In such cases the person approving should assess the reasonableness of the expenditure. Amos is the manager of Client Accounting Services in SCG. 4.3.2. Thesesinglereimbursements shouldnotexceedsixtydollars ($60). The petty cash and the supporting documents should be available at the time of the count. Business owners may designate an accounting employee to handle the petty cash. 5. Unlock petty cash. The float reduces the risk of holding too much cash that you may not require, or indeed too little cash. The purpose of this standard operating procedure (SOP) is: To show how to write up a petty cash book and vouchers To understand the procedure and steps involved in completing the reconciliation To show the importance of accurate recording and reconciliation processes Check Request Form. Decide on a float and when to replenish. Decide on a float and when to replenish. The amount in a petty cash fund will vary by organization how much is held, and how the petty cash is used are determined by the managers of the business. Payments that exceed the limit should not be paid out of petty cash. The maximum amount that can be disbursed out of petty cash. Have two people responsible for petty cash. Total up the amounts on the vouchers and ensure that the total calculated agrees with the reimbursement sought. Unlock petty cash. For security reasons, the petty cash fund should be locked at all times when it is not in use. Record vouchers in general ledger. Since this increases the petty cash fund balance, the cash account is debited (Field 11). The accounts payable staff creates a check made out to the cashier in the amount needed to fund petty cash to its stated limit. They assume that because its a small amount of money, they do not need to pay attention to controls over how it is spent. Scrutinize the vouchers, checking that the amounts on the vouchers and receipts agree. Check that the vouchers are in order and calculate the total amount disbursed. The person approving the request should ensure the following: The petty cash on hand must be counted periodically, and the cash counted reconciled to the balance on the petty cash account. To determine the amount of the float, consider the typical small payments you make within a defined period such as a week or month and set a reasonable float amount. As responsibilty is transferred between the two make sure that cash and vouchers are counted to reconcile the amount of funds. Petty cash, also known as petty cash fund, is a small amount of cash on hand that is used for paying small, everyday business expenses. The first step is to define how much you would like to keep as a float in the petty cash, and the level at which petty cash must be replenished. Add cash to petty cash fund. For the cash count to serve as an effective control: To check whether the correct amount of petty cash is on hand, the person carrying out the count should do a reconciliation as follows: Since a lot of business dealings in Ghana involve cash, the amount of money passing through petty cash can be significant. Store all completed vouchers in the petty cash box. 6. Review and approval of petty cash reimbursement request. Define the expense limit and approval matrix, 4. Deduct the amount from the float to get the balance that should be on hand. SCG Chartered Accountants was set up with one central mission to provide value-driven results with you central to our thinking. The disbursement procedure for petty cash is designed to provide sufficient documentation of each expenditure, as well as proof that funds were actually disbursed. Obtain all the petty cash vouchers that have not been reimbursed. Whenever a voucher is completed, the custodian should immediately update the petty cash book by adding the amount, type, and date of the expenditure and updating the running cash balance. Businesses have lost significant amounts of money over time because of a lack of control over petty cash spending. In a small company, it may not be possible to have different people responsible for the petty cash funds, keeping the petty cash accounts and approving petty cash payment. The above suggestions can help you establish control and reduce the risk of theft. The petty cash custodian retains a copy. Examples of petty cash use includes payment for postage, phone cards, and reimbursing travel expenses. Upon receipt of cash, the recipient must sign The procedure for petty cash funding is outlined below: Complete reconciliation form. Pettycashfunds providecashto unitsand departments to cover minorexpenses,such as reimbursement ofstaff members andvisitors for smallexpenses like such as taxi fares,postage, and officesupplies. taxi rides, receipts may not be available. 3. The petty cash count is a means of verifying that cash balance exists. This information can also be maintained on an electronic spreadsheet. Weak controls over cash in an environment where employees are often hard pressed for cash creates a tempting opportunity for embezzlement and fraud. This step is needed to track the types of expenditures being made, which can then be charged to various expense accounts. A primary custodian and secondary custodian. 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