Imprest system Wikipedia

imprest balance

The amount of currency and coin plus the petty cash receipts in the fund should equal the authorized amount of the fund. Imprest custodians are encouraged to maintain imprest funds in a local bank account at a KCTCS approved depository institution for protection and record keeping. Retail petty cash funds should be reconciled semi-annually on a surprise basis by a Business Officer or designee other than the custodian. Research-related petty cash funds should be reconciled monthly. Whenever disbursements are made, the fund must be replenished at least monthly by warrant or check.

What are the 5 petty cash controls?

  • Appoint someone as petty cash custodian. Only one person at a time should be given responsible for the fund.
  • Fund the account.
  • Secure the funds.
  • Establish policies.
  • Record disbursements.
  • Require receipts.
  • Replenish funds when low.
  • Monitor spending.

Current operations are flexibly budgeted based on the estimated level of services to be provided and long-range sources and uses of assets are controlled by annual/biennial appropriations and continuing appropriations. Fixed budget – Those budgets which set an absolute maximum or ceiling on the expenditures of a particular fund, department, or other specific category. A fixed budget can be either an annual/biennial appropriated budget or a continuing appropriation. Fixed budgets must be adopted by ordinance or resolution, either for the government’s fiscal period or at the outset of a service project, debt issue, grant award, or capital project.

The Future of Imprests

The allowable maximum limit of a single imprest disbursement is $100 unless prior approval is obtained from the KCTCS Assistant Vice President of Business Services/COO. As Petty Cash Funds are utilized, a Payment Request Form must be prepared and submitted to Accounts Payable along with appropriate documentation (e.g., original receipts). Custodians may also create an online Non-PO Voucher and attach the Payment Request Form and appropriate supporting Documentation. The official version of this information will only be maintained in an on-line web format. Any and all printed copies of this material are dated as of the print date. Please make certain to review the material on-line prior to placing reliance on a dated printed version.

imprest balance

Not setting the expenditure limits for every nominal transaction can even put an organization at the risk of overspending on purchases. Accounting ErrorsAccounting errors refer to the typical mistakes made unintentionally while recording and posting accounting entries. These mistakes should not be considered fraudulent behaviour first-hand as this can happen with anyone and by anyone. One of the major drawbacks of using an Imprest system is that it causes huge inconvenience for larger expenses.

Changing Imprest Fund Custodianship

This person should not have custody of accounting records. The KCTCS Assistant Vice President of Treasury and Accounting will maintain a list of all fund custodians and their respective funds. A copy of any supporting documentation for account closure. Complete a TM12 Form and forward to the KCTCS Assistant Vice President for Treasury and Accounting.

  • For example, if the petty cash account in the general ledger has an imprest balance of $100, the account balance will be a constant $100.
  • Without appropriate controls, the company’s petty cash account can be misused by employees, and it will become tough to find out who took out the cash.
  • At the end, the cashier submits the vouchers to the chief cashier along with vouchers.
  • The account was divided between internal and external legal services.
  • If the fund is maintained in a bank account, the account must have a month-end cutoff and a copy of the bank statement and bank reconciliation must be submitted with the fund reconciliation.

Copy of original receipt/paid invoice. Must be signed by the custodian’s department head. Imprest funds will not be authorized for greater than $500. Disbursements must be in compliance with established business procedures. Exception approvals must be attached to the supporting documentation for reimbursement.


Under the imprest system, only that which is recorded as spent is replenished. Any shortfalls may need to be replenished by the guardian of the float, usually a bookkeeper, from their own personal resources. It is much more difficult to reconcile a non imprest system as one never knows how much exactly should be in the float.

imprest balance

Imprests may also be used to cover employee payroll, dividends, employee travel, and bonuses. After these outgoing expenses are paid, the fund is typically reimbursed by capital from the company’s primary bank account.

What Is the Imprest System?

Each imprest fund is assigned to the custody of a single individual that is the university’s agent and custodian for the fund. A department head or equivalent administrator must authorize the Request for Imprest Fund form and designate the custodian. The custodian is personally responsible for maintaining and reconciling the fund. The term imprest account refers to a bank or cash fund that is dedicated to a specific purpose. An imprest account will always have the same balance. Once established by a company, the account will never require a future journal entry.

What is petty cash in simple words?

: cash kept on hand for payment of minor items.

In this imprest cash system, the balance of petty cash funds always remains fixed or constant. The amount to be fixed is decided at the start or first time at a fund established. During the period, the petty cashier pays the expenses and maintains vouchers for that.

Imprest funds should be used on justifiable business versus a matter of convenience. Supporting documents must also specify the business purpose for the expenditure. If the original receipt is not available, a memo from a Higher Administrative Authority explaining the circumstances imprest balance is acceptable as suitable evidence. At a minimum, Payment Request Forms must be prepared and submitted for all Petty Cash Fund disbursements prior to June 30 each year or by the specific contract expiration date if established for a particular sponsored project.

  • Such ordinances or resolutions set an absolute maximum or ceiling on the expenditures, but the time period for incurring expenditures does not coincide with the government’s fiscal year; it may even cover several years.
  • The Imprest account has a set amount of cash and is recorded in your company’s ledger.
  • In return, the latter furnishes such receipts that are business-related.
  • Therefore, an imprest account is thought to offer companies some protection against fraud.
  • If not, it could have too high a balance and Procurement Services will discuss with the fund custodian and/or the Higher Administrative Authority whether the current balance isappropriate.

Firstly, an Imprest account is created. This account is used to pay for incidental expenses, such as flowers for an employee who’s leaving the company. The Imprest account has a set amount of cash and is recorded in your company’s ledger.

It also allows the company to carefully monitor and forecast expenses. Petty cash funds are used in order to provide change at retail locations for approved University activities. Petty cash funds can also be used in select research-related studies when alternative disbursement methods are not an option. The amount of the fund requested should be limited to minimum operating requirements to prevent theft. All other 518 codes not listed above – Allowed in all governmental funds or internal service funds.