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Imprest Funds – Discover the Main Principles of that Kind of Funds!

Imprest funds are a popular term today. People choose this system of loans because of a great possibility to pay in cash without using their general ledger account. Moreover, those who often blow off can control their expenses knowing they have to replenish their expenses by the end of a certain period. What does Imprest fund mean? In fact, Imprest fund means any cash fund belonging to any individual, department, company or a group of people, that can be used by a specially appointed cashier permanently when there is a need for making purchases in cash of a small amount origin.

In general, the main idea of imprest funds is to replenish the expenses. That is you spend and then replenish to spend once again. So, imagine you start the month with the full account of $200 provided in your petty cash float. You spent $190 of that amount within a month and you are to bring back the $190 to your petty cash to make your balance equal to the initial one provided at the beginning of this month. The curious fact is that this replenishment goes to the primary cash account while the debit is paid to the certain expense account according to the petty cash vouchers you have.

Usually Imprest funds are fixed funds (more often petty cash funds) that are presented in the form of currency or coins used for making a small amount of payments. The question is – should an Imprest fund be always fixed or set amount? In fact, there more fixed amount today as it is really more comfortable to keep a record of a fund. But there are always exceptions. Thus, there are special funds that have no limits and rates. Usually they are used by the agencies if they don’t have an Imprest fund.

Why are Imprest funds in the form of a petty cash so popular today? First of all, you have the maximum amount of a petty cash – every establishment or individual has its/his own petty cash limit. And you are to spend the limited amount you have and then replenish the limited amount you’ve spent. So, if your initial petty cash amount makes out $150, you’ve spent $140 you are to replenish $140 to bring the float back to its initial condition it had at the beginning of the certain period within which you’ve managed to spend the money.

There is also a non imprest system of a petty cash where there is no such a rule with a fixed amount that is spend every month. There are no checks or vouchers provided during the spending processes but once you’ve spent all money you are to replenish it. It is less convenient for many people as they never know when this limit is over. And it is much more complicated to replenish that system as you never know the exact float sum.

All the Imprest funds are kept in a record with the help of documentation presented by the petty cash dockets or receipts. Thus, the exact time doesn’t matter as you can check the exact sum left in your petty cash float anytime you want.

Petty cash Imprest funds consider that the custodian should document the way he uses his petty cash. Thus, this imprest petty cash system implies the dockets written for each amount that has been spent. At the end of the month all the dockets written are totaled and deducted from the petty cash float showing the sum amount left in the float of a petty cash. Then according to the Imprest system main feature this report records how much as spent and how much should be reimbursed.


Tags: Mutual Mutuals Closed End Funds Open end fund Bonds cash funds

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