Petty Cash Policies and Procedures of garments
PETTY CASH POLICY & PROCEDURES
TABLE OF CONTENTS
1.1 POLICY ……………………………………………………………… 1.2 DEFINITION…………………………………………………………. 1.3 OBJECTIVES…………………………………………………………. 1.4 CASH TRANSACTION PRINCIPLES………………………………. 1.5 PROHIBITED PURCHASES/USAGES OF FUNDS………………… 2.1 AUTHORIZATION LEVEL………………………………………….. 2.2 IMP REST LIMIT……………………………………………………… 2.3 ESTABLISHMENT/EXECUTION…………………………………… 2.4 REPLENISHING THE PETTY CASH FUND……………………….. 3.1 SAFEGUARDING THE PETTY CASH FUND……………………... 4.1 CHANGEOFCUSTODIAN……………………………………………
5.1
1.1 POLICY
Petty cash funds established to settle irregular small or
emergency cash purchases on the basis of demonstrated need. It is to be used
only for the acquisition of those unanticipated items and regular minor
expenditure cash payment.
1.2 DIFINITION
Petty cash funds are revolving impest accounts that are used
to make small or emergency purchases/ expenditure to avoid the inconvenience
for safe guarding and dispensing cash fund.
1.3 OBJECTIVES
a) The
objectives of this Petty Cash Policy is to ensure that all entities when the
group are enjoying efficient cash payment, avoid misuse of petty cash and
ultimately contributed in expenditure control.
b) The
purpose of this policy is to establish the authority, standard procedure,
regardless and effective internal administrative control of cash transactions.
1.4 CASH TRANSACTION PRINCIPLES
a)
Justification of expenditure
b)
Efficient Purchase
c)
Optimization of quality and price
d)
Transparent transaction.
e)
Ensure expenditure budget limit.
1.5 PROHIBITED PURCHASES/USAGES OF FUNDS
No item should be handled as a petty cash item that can be
readily secured through normal procurement channels on credits. An item that
would no t ordinarily be purchased by the Purchasing Department as an
acceptable item for expenditure is also prohibited from being purchased through
petty cash funds. The fund custodian, procurement manager and CFO carefully
monitor purchase with petty cash funds since these purchases bypass the
Purchasing Department’s control over procurement.
The following items will not be reimbursed from petty cash:
(Note: List is not all- inclusive)
● Single purchases in
excess of Tk. 5000/-
● Equipment of any
kind
● Payment to an
individual for services rendered
● Software
● No IOUs for cashing
personal checks
● Items purchased
more than 30 days prior to request for reimbursement
● Custodians neither should nor use personal
funds in- lieu of petty cash.
2.1 AUTHORIZATION LEVEL/LIMIT
a) Head
office/ Factory/ Ctg Zone-All petty cash expenditure should notify to H.O
before making any payment. Unit In-charge/ GM will authorize the expenditure
with proper justification (if required)
b)
CFO will review the expenditure and approve.
c) Any
sort of financial approval made by CFO will intimate to Vice CEO/Executive
Director .
d) On
receipt of approval from CFO, payment may be made on the availability of cash
with custodian.
2.2 IMP REST LIMIT
The company will maintain 3 Floats in 3 different locations
a)
H.O. Float-tk.75,000/-
b)
DEPZ Float-Tk.100,000/-
c)
CEPZ Float-Tk.50,000/-
Al together Float Amount Tk.2,25,000/- on the basis of
imprest
2.3 ESTABLISHMENT/EXECUTION
Establishment of a petty cash fund or increases to existing
funds may be requested by custodian through Sr. Finance Manager to CFO. Final
approval will be given by Vice CEO/ Executive Director
Petty
cash payment will be made twice a day within specified timings . Proper
schedule can be established as per requirement of Cost center.
2.4 REPLENISHING THE PETTY CASH FUND
a) Float
limit is to be split in to two part 80% & 20%. Petty cash fund may be
reimbursed as frequently as required when it balances exceeds 80% limit.
Maximum 20% is to be kept for emergency expenditure during lead time.
Replenishment is to be made in 24 hrs at max.
b) Petty
cash expenditure statement is to be counter signed by Sr. Finance Manager &
CFO as well.
c) All
petty cash funds must be reimbursed at fiscal year end (prior to June 30) in
order to charge expenditures to the proper accounting period.
3.1 SAFEGUARDING THE PETTY CASH FUND
Petty cash funds and supporting documents (receipts) must be
kept in a safe location (i.e., locked up in a safe, vault, or desk drawer) and
must not be commingled with any other funds. The fund should be verified and
reconciled on daily basis.
Petty
cash status has to be counter signed by GM/CFO level in place.
Any in
fortunate, incident; Admin GM will be in touch for further inquiry/ action.
Petty
cash funds may be audited (unannounced)
at random times throughout the year by the office of internal audit and / or
the office of state auditor. Persons declaring themselves as authorized to
conduct an audit must be identified before funds or records are relinquished.
The custodian should remain with the auditors at all times to observe the
counting of petty cash form prepared by the office of internal audit. At
June’30 of each year, each custodian will be requested by letter to confirm the
amount of the fund in his/her possession
4.1 CHANGE OF CUSTODIAN
a) The
cashier/ executive (cash) will modify to CFO by a memorandum in case of
temporary changes (not less than a week) of custodian.
b) A
“cash handing over note” to be prepare with currency details duly signed by
both(existing & new custodian)
c) Cash
handing over note should counter signed by CFO
d) In
case of permanent changes. Step#2 &3 to be followed.
e) The
fund custodian must ensure that the fund is replenished before it is turned
over to a new custodian. Unauthorized transfer of custody between employees is
not permitted and may result in disciplinary action.
Cash Handing Over Note
Petty cash Float Amount: _______________ Physical cash: _________________
IOU slip: ______________No____
Physical
Currency Details:
1000 x
500 x
100 x
50 x
20 x
10 x
5 x
2 x
1 x
___________
Total
___________
Handed over by:_______________________ Taken over by: _________________
Signature : Signature
:
Counter Signed By _____________________ ___________________
Sr. Finance Manager CFO
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