Michigan Petty Cash Funds are a financial tool used by organizations and businesses to maintain a small amount of cash on hand for quick, low-value transactions. These funds are specifically designed to cover small and immediate expenses that arise in day-to-day operations, eliminating the need for writing checks or processing reimbursements for every small payment. In Michigan, there are several types of Petty Cash Funds that organizations can establish, depending on their specific needs and requirements. Here are some common ones: 1. General Petty Cash Fund: This is the most common type of Petty Cash Fund in Michigan. It is used by businesses to cover a wide range of small expenses such as office supplies, postage, taxi fares, meal allowances, and other miscellaneous expenditures. 2. Departmental Petty Cash Fund: Larger organizations with multiple departments may establish separate petty cash funds for each department. This allows for better control and accountability as department heads are responsible for managing and maintaining their own fund. 3. Travel Petty Cash Fund: Michigan businesses often establish a separate petty cash fund dedicated to employee travel expenses. This type of fund is used to reimburse employees for small travel-related expenses, such as parking fees, tolls, and emergency incidentals. 4. Event Petty Cash Fund: Organizations or businesses hosting events or conferences may create an event petty cash fund. This fund is designated solely for event-related expenses like decorations, refreshments, small payments to vendors, or emergency purchases during the event. To establish a Michigan Petty Cash Fund, organizations must follow set guidelines and maintain proper accountability. These guidelines usually include limits on the total cash amount in the fund, detailed record-keeping of each transaction, a designated custodian responsible for managing the fund, and periodic audits to ensure compliance with accounting standards and policies. Organizations obtaining a Michigan Petty Cash Fund need to ensure that they have proper policies and procedures in place to govern the handling, disbursement, and replenishment of funds. Petty Cash Funds are subject to scrutiny during financial audits; hence, it is crucial to maintain accurate records and keep receipts for all transactions. In conclusion, Michigan Petty Cash Funds are a convenient way for organizations to handle small expenses promptly. By having different types of funds specifically tailored to their needs, organizations can efficiently manage petty cash transactions, maintain financial control, and minimize administrative burdens.
Michigan Petty Cash Funds
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Petty cash provides convenience for small transactions for which issuing a check or a corporate credit card is unreasonable or unacceptable. The small amount of cash that a company considers petty will vary, with many companies keeping between $100 and $500 as a petty cash fund.
The procedure for petty cash funding is outlined below:Complete reconciliation form. Complete a petty cash reconciliation form, in which the petty cash custodian lists the remaining cash on hand, vouchers issued, and any overage or underage.Obtain cash.Add cash to petty cash fund.Record vouchers in general ledger.
A petty cash fund is a small amount of company cash, often kept on hand (e.g., in a locked drawer or box), to pay for minor or incidental expenses, such as office supplies or employee reimbursements. A petty cash fund will undergo periodic reconciliations, with transactions also recorded on the financial statements.
Petty cash should not to be used as an operating fund, i.e., to pay invoices for goods or services, to pay salaries or wages, or to make advances or loans. In accordance with Policy 1505, the petty cash fund cannot be used to: Purchase goods currently covered by a University negotiated contract.
How to Set Up a Petty Cash Management SystemAppoint a Custodian.Fund the Account.Secure the Funds.Establish Policies.Record Disbursements.Require Receipts.Replenish Funds When Low.Monitor Spending.More items...?
Petty cash provides convenience for small transactions for which issuing a check or a corporate credit card is unreasonable or unacceptable. The small amount of cash that a company considers petty will vary, with many companies keeping between $100 and $500 as a petty cash fund.
Petty cash funds should be properly secured at all times. Access to the funds should be restricted to one person (e.g., the petty cash custodian or a specified cashier). Cash on hand and receipts for disbursements made should always equal the assigned amount of the petty cash fund.
Dear Sir or Madam (or the name of the finance manager), I am writing this email to ask you for the approval of a petty cash request, for the value of (enter requested amount here). This request is for official purposes only and is necessary for the (explain why you need a petty cash withdrawal).
To establish a petty cash fund, someone must write a check to the petty cash custodian, who cashes the check and keeps the money in a locked file or cash box. The journal entry to record the creation of a petty cash fund appears below.
Overview and Purpose The purpose of a Petty Cash Fund is to allow for the reimbursement or purchase of minor, small-dollar (less than $100), unanticipated business expenses, where the use of alternative means is neither feasible nor cost effective.
