Committe Corner
- Thread starter VK3YNV
- Start date
VK2RK
Active member
Good Morning
With concern raising from the meeting regarding the procedure on how to handle petty cash along with my inability to state the proper procedure so here is how its done and is standard, in fact its a responsibility set out by the constitution for proper accounting procedures accounting practices.
All transaction have to be recorded, under no circumstances, any cash money paid into the club can’t be used to automatically top up petty cash, it would be convenient but is not proper for all sorts of reasons.
All incoming and outgoings money be it cash or any other form has to be recorded in the general ledger.
Petty cash is an expenditure and any transaction against this is recorded as petty cash expenditure, a separate account book called the Petty Cash book is used to record incoming and outgoings, top up becomes and is recorded as incoming as are the outgoings with evidentiary receipts.
Petty cash is balanced and reconciled monthly in the general ledger.
THe bank statement should reflect these movements of money with respect to petty cash.
In the general ledger, petty cash movements are recorded as top up or expenditure totals monthly, no need for details as these can be found in the petty cash book.
The fact that we no longer have the convenience of cheque book system it does not exclude the proper procedure as set-out above, if money has to be drawn to top up petty cash then one has to go to the bank and withdraw the amount as required for the purpose to top up petty cash.
Accounting procedure are designed to provide check and balances, deviating from the proper procedures becomes questionable and dangerous should something go wrong.
As stated by accounting 101
How to reconcile petty cash
With concern raising from the meeting regarding the procedure on how to handle petty cash along with my inability to state the proper procedure so here is how its done and is standard, in fact its a responsibility set out by the constitution for proper accounting procedures accounting practices.
All transaction have to be recorded, under no circumstances, any cash money paid into the club can’t be used to automatically top up petty cash, it would be convenient but is not proper for all sorts of reasons.
All incoming and outgoings money be it cash or any other form has to be recorded in the general ledger.
Petty cash is an expenditure and any transaction against this is recorded as petty cash expenditure, a separate account book called the Petty Cash book is used to record incoming and outgoings, top up becomes and is recorded as incoming as are the outgoings with evidentiary receipts.
Petty cash is balanced and reconciled monthly in the general ledger.
THe bank statement should reflect these movements of money with respect to petty cash.
In the general ledger, petty cash movements are recorded as top up or expenditure totals monthly, no need for details as these can be found in the petty cash book.
The fact that we no longer have the convenience of cheque book system it does not exclude the proper procedure as set-out above, if money has to be drawn to top up petty cash then one has to go to the bank and withdraw the amount as required for the purpose to top up petty cash.
Accounting procedure are designed to provide check and balances, deviating from the proper procedures becomes questionable and dangerous should something go wrong.
As stated by accounting 101
How to reconcile petty cash
- Ascertain the float. ...
- Count the cash. ...
- Add up the recorded transactions (via vouchers and the log). ...
- Categorize disbursements. ...
- Identify and investigate the differences between vouchers and the expected balance. ...
- Record transactions in your general ledger. ...
- Replenish the float for next month.