Imprest System – a Loan System Controlling Fraud and Theft!

Today there are lots of loan systems offering the customers comfortable credit conditions and simplifying their lives making everything come true. You can easily buy a car or purchase a house, start your own business or deal with the debts (unfortunately, everything may happen in this life) taking a loan. But as any financial operation loans can often make you a victim of theft and fraud. How to deal with it properly? In fact there are various loan systems that are worth trying them. Imprest system is one of them.

The main aim of the Imprest system is to protect the transaction party from fraud and theft. The main Imprest system principle is petty cash option. In general the cash book definition is the following in all the systems. The total sum information is posted to the cash book. At the end of the stated period – usually it is a month, but different systems work with different periods – the petty cash is replenished with the amount of cash that was spent during the period. This amount information comes from the report provided to the cash book. Thus, the petty cash book system is provided in the Imprest system. Following this system the one that has a petty cash is called a petty cashier. Thus a petty cashier gets a certain amount of money that is called float that is limited by the balancing period needs. The person gets a cheque where all his payments are stated within a certain period. He has to cover them – that is to replenish his account amount he had at the beginning of this period. So, the main idea of this system is to make the petty cash balance at the beginning of the month equal to the previous month cash balance amount.

This means that the petty cash system works according to the main imprest system rules – that is according to the replenishment of the sum you have spent. As it was stated in the previous article the limit of the petty cash float is $100. So you can to spend $90 from this sum a month and then you are to replenish this sum to your account to bring your petty cash float balance back to the initial sum you had there - $100. It’s important to take into account that Imprest system is controlled documentary. So these petty cash documents are written for any amount. At the end of the month all these documents are totaled showing the sum left in the petty cash float. And then according to Imprest system principles the sum that is spent should be replenished. Otherwise in case you can not do it it should be replenished by a guardian that is usually presented by a bookkeeper that can do take the expenses from his own personal account petty cash float.

What is to replenish the imprest system petty cash? So, that means that you cover all the expenses for the cash receipts that were taken against the cash and cut your check for the expenses amount. Thus, it is very comfortable for those who know the limits. S long as the balance of the mount is adequate your petty cash account will not have the problems. But once it gets low you’ll get a request to reimburse the money you’ve taken from it.

How does this petty cash book looks like? Normally it is a book that is kept for controlling the petty cash of any company or department. It keeps a record of the daily transactions performed when dealing with the Petty cash account. In fact today every company has a petty cash system that is often known as a small amount of money kept in hand. This petty cash system is irreplaceable in various expenses of emergency character. It is also suitable for every day purchases: products, cloths, travelling and all that jazz. Thus, the company is rid of getting the cash out of banks day by day.

What are the advantages of a petty cash Imprest system? First of all, it is an easy way to cover the simple cash expenses without indicating them in the general cash book. Such expenses are usually presented by stamps, postage, newspapers and other simple stuff of that kind. Moreover, many people use this system in order to save the chief cashier time as they usually write up their cash book or post it into the ledger. Others choose this system as it provides a good control over their small payments. Moreover, this system helps avoiding various arithmetical and mathematical errors, often occurring with the cash book operations. And finally, there are some situation and countries where all the companies have to report all their expenses made daily starting from buying a pen and finishing with purchasing an office. They have to keep a record on their monetary operations. In that case the Imprest system is really very comfortable as it allows controlling all the monetary processes performed.

Tags: free credit account online credit account Finance system petty

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Imprest money is better known as petty money provided to special people working at any establishment and managing the several day expenditures on various things and making sundry purchases.


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2010-Nov-10 15:11 Francis Scott [Saint Paul]

First of all, it is an easy way to cover the simple cash expenses without indicating them in the general cash book.

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