1. recap unit 11

2. Purpose – What is petty cash?
Money is used to buy small items, particularly when cash is needed to pay for them.
Examples – postage, stamps, travel expenses, stationery, refreshments – Company will usually set maximum value
Activity – Circle items that may be used for Petty Cash

3. How much in the box
The size of the petty cash fund is determined by the needs of each business. The amount is know as the FLOAT or IMPREST – from £50 to £500 – Company will decide

4. Who’s in charge of petty cash?
Petty Cashier and sometimes an assistant which could be you.

5. Security
Staff must usually get permission before they can spend money to reclaim through petty cash
Needs to be kept in a locked box, in a locked drawer
Only one person responsible for the box and keys
Set maximum limit for cash payment
List items that are suitable for cash payment

6. Important that petty cashier keeps track of what is put in and out
Importance of balancing petty cash regularly – look at cash sheets from last week – how much do you need to put back to make up to £125
Important that petty cashier keeps track of what is put in and out
So each month petty cash adds up correctly

7. Checking petty cash claims for accuracy – why is it important.
People may have made errors and may try to get money for unauthorised items
A receipt is always needed with the Petty Cash voucher

8. What happens if you do not maintain security when dealing with the payment of petty cash Procedure?
Employees may steal and cheat the system

9. How would you reconcile your written records with the actual cash?
What does reconcile mean?
Make one account consistent with another. Make sure the accounts agree.
When you add up the total receipts and petty cash vouchers and the cash left in the petty cash box it should be the equal to the amount of petty cash set ( in our case £125)

10. What do you do if there is a discrepancy?
What does discrepancy mean?
A difference.
You need to investigate, find the discrepancy and correct it. If not you need to tell your supervisor.

11. Recording petty cash in the petty cash book – use spreadsheet – Task 2

12. Cash Analysis book – Task 3
As an administrator you may be required to record payments in the Cash Analysis book. These payments are the result of invoices sent to the customer.
Payments must be recorded with detailed analysis

13. Cash analysis book

14. Task 4 – Information Sheet recording payments from customers
Ensure Invoice amount same as amount received – deal with discrepancies
Provide efficient service – don’t accuse vulnerable customers of not paying – unprofessional
Follow accountancy rules – avoid allegations of fraud
Calculate VAT
Calculate profit and see if business can continue to run

15. How sunbeam processes payments from customer
Look at cheque – match to invoice number
Enter details in cash analysis book. Bank cheques daily
Look at BACs payment received – match to invoice – log cash analysis book
Cash – invoice – cash analysis book
Show discrepancies in cash analysis book
Payments automatically posted to customer’ s statement
Issue credit note for overpayment
Underpayment – send letter requesting payment

16. Recording payments – when errors made
Credit note issued
Posted to customer statement, invoice for next month reduced

17. Recording payments accurately
Efficient service to customer
Calculate tax to Inland revenue
Calculate profit
Deal with customer enquiries and refund quickly and efficiently.

18. Organisational policies
Students to research the Data Protection Act
If everyone follows same procedures – ensures accuracy and efficient, confidential service