Main Issues on Imprest Money System

Today Internet is full of questions: what is Imprest money? In fact, Imprest money is also called petty cash the main feature of which is an Imprest one. In case one doesn’t turn his money into petty cash this money can’t be called Imprest means paying (or lending) a fixed sum of money to a fund so that then one can use it in his future expenditures process. So, it’s easy to realize that petty cash doesn’t actually exist if you have no cash in the fund. Pay your attention, petty cash main advantage is an overcontrol of fraud as usual banks can’t be proud of such a feature if speaking about small expenditures.

Imprest and Non-Imprest money

Lots of people wonder what the difference between Imprest and non-imprest systems is. Here everything is quite clear: if we deal with non-Imprest system, the fixed amount covers the time within a month. The non-Imprest money system is applied within under the terms that when cash is required one doesn’t need to make the expenditures dicumented as when the total sum of money is spent he gets the fixed amount cheque provided by the chief cashier. That’s why, it’s quite easy to understand that it’s more complicated to reconcile that kind of system because you have no idea of the exact sum of money of the account – this system had some risks of fraud.

As far as Imprest money system is concerned,the key feature here is documentation and steb-by-step control of the total sum of money. It means that all money is controlled by documenting it. Anytime you need to check the exast amount of money spent you get such a possibility.

In general, Imprest money system is a special type of financial account mostly known as petty cash system. The main system feature is the reserved amount with a fixed feature. The account can be – and mostly it is – refreshed in the end of the particular period (or when it is necessary to be refreshed). The main sense of petty cash system is the replenishment of money spent. That means that for instance if your month starts with some $50 in your petty cash amount and by the end of the month it is left only $40 then the spent $40 is added to your account to start the new month. It is credited to make the total account sum $50 again.

What is so special about Imprest money?

The main issue about the system is that you can spent only the sum you are provided – in this case $50 and then the account is only replenished to the sum you had in the beginning. Moreover, Imprest system implies all the expenditures being fixed in documents that means high level of control system.

How Imprest money works?

According to the system the manager is required to give documents proving his expenditures. These documents are called petty cash dockets. These dockets are provided for every amount of money spent. At the end of the month all the dockets provided for spent money are calculated totaling the amount of money spent. The replenishing is provided only for the docket expenditures. In case there are some shortfalls the guardian is to add the means provided for them for himself taking them from his own financial resources.

As a matter of fact, today there is a big variety of loan systems that compete with each other in comfortable conditions of a provided credit. But usually such systems imply big deals like purchasing a house or a car. But how to deal with every day needs? Imagine you work at the office or you own an office and even have an employee responsible for routine purchasing like those including stationery office materials and so on? This is exactly the reason of the existence of petty cash Imprest system allowing to trust the employees by knowing all the expenditures they’ve made due to the dockets they show you – and actually not you (they provide it to the system) – by the end of the month so that the account will be replenished.

The main aim of the Imprest money existence is protection - that is the main key word in this process – of the transaction party making it rid of fraud and theft. It is a so called returnable system – you can use it every month simply by covering the expenditures made within a certain period by cutting your cheque.

There is also an important term called petty cash book that looks like a usual book managing any institution or establishment petty cash recording every day routine transactions made on the Imprest account. According to the statistics, every American company works with petty cash system today as it is really helpful for various emergency expenditures of an every day office life like stationery materials, food for the office staff and so on. You can even use the system for your home routine buyings like cloths, products, travelling and so on.

Tags: credit bank account online credit account Mutual Open end fund Finance Money Financial account advantages system cash petty funds

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