There are Following system of internal is very useful for petty cash transaction.
1. Immediate recording of entries:
Entries from the voucher should be immediately recorded in the cash book. The petty cashier must be a person different from the cashier.
2. Use for small expenses:
Petty cash must be used for the small expenses and not for bigger payments. It may not be used for payments of wages or to the supplier.
3. Support of voucher:
Voucher must be supported by external documentary evidence while obtaining payments from the petty cash.
4. Checking of initial of cashier:
Every month the cashier should verify and initials the petty cash book when the petty cash is reimbursed or cash book postage is examined.
5. System of vouchers:
All the system of petty cash book should be up to date. The entire voucher should be numbered consecutively. The entire voucher should be properly filed.
6. Use of imp rest system:
Petty cash system should be used the imp rest system. Column petty cash book is very useful and it should be maintained by the petty cashier.
7. Surprise checking:
Trustworthy officer should do the surprise checking of the petty cash in hand.
8. Payment by authorized person:
A liable person who is authorized to make the payments should allow the payment on voucher.
9. Use of slip or docket:
If voucher system is not possible in some cases the slip system can be introduced. Slip of particular amount should be issued by the officer who has spent the money. In this way maintain proper record will be available for checking.
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