Petty cash
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Petty cash Our club has not had a petty cash fund, but would like to start one. I would like information on how to get started - What is the source of the money that goes into petty cash? Is there a standard amount that is usually given monthly? Which officer handles the petty cash? Is there a standard limit on how much petty cash can be given for expenditures? What bookkeeping is involved? I would appreciate any other tips/information that you feel would be useful. Thank you! Hi Shirley, This is a good question. Many people may have a similar one. The first thing I'd ask is what you are trying to accomplish when you ask for a petty cash account? An "off the books" petty cash account was a concept that was removed from club accounting some time ago. You can create separate accounts in bivio and you can track deductible and non deductible expenses that are involved with managing your club's assets. All expenses will affect your portfolio's return. All money your members contribute is entered as payments so that they receive the correct credit toward their club ownership. It all becomes part of your club assets and is available for investing or for expenses. If you have an expense in your club that does not apply to all owners or is not related to managing your investments, it should be handled outside your club accounting. Laurie Frederiksen bivio Inc. -----Original Message----- From: club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Shirley Taber Sent: Sunday, May 03, 2009 11:17 PM To: club_cafe@bivio.com Subject: club_cafe: Petty cash Our club has not had a petty cash fund, but would like to start one. I would like information on how to get started - What is the source of the money that goes into petty cash? Is there a standard amount that is usually given monthly? Which officer handles the petty cash? Is there a standard limit on how much petty cash can be given for expenditures? What bookkeeping is involved? I would appreciate any other tips/information that you feel would be useful. Thank you! At 09:16 PM 5/3/2009, you wrote: I would like information on how to get started - Members. Is there a standard amount that is usually given monthly? Any amount that you, the club, decide on. Which officer handles the petty cash? The treasurer. I suppose someone else could do it. Is there a standard No. But please define expenditures. Petty cash is used to pay for NON deductible expenses. Like a celebratory dinner for the club's anniversary or a get well card for a member. What bookkeeping is involved? The same as any other. What goes in and what goes out. That's it. I would appreciate any other My club collects $25.00 when a member joins, that is accounted to the Petty Cash Fund. That money is deposited into our checking account. Bivio has a place for a Petty Cash fund. This money is separate from contributions etc. Think of it like a slush fund for incidental expenses. When the fund runs low or you need more money the club can decide how much to assess. When a member withdraws they do NOT get a portion of whatever is in this fund. Cherilyn Peay, NM Chapter In a message dated 05/04/09 00:09:16 Eastern Daylight Time, cpeay@comcast.net writes:
NO!!! All expenditures should run through the regular accounts. A petty cash account is used to track cash that is not held in a bank/broker account, such as real currency held for small out-of-pocket expenses such as stamps, photocopying, etc. The software knows what to do with nondeductible expenses as soon as you designate one as such. It doesn't matter where the expense is paid from.
They most certainly do get a portion of whatever is in the fund. Their withdrawal payoff is based on a percentage of what is in all of the cash accounts and security values on the withdrawal valuation date. You may not be showing a reduction in your petty cash balance as part of the withdrawal, but whatever portion of that account was attributable to the withdrawing member (based on current ownership percentage, not based on how much they contributed) was taken from another cash account.
There is no need to assess additional funds to top off the petty cash account, all you have to do is transfer money from your other cash account(s). Furthermore, if you are recording the assessments as fees and not member contributions, you are enriching your larger members at the expense of the smaller ones.
Ira Smilovitz
>They most certainly do get a portion of whatever is in the fund. Their withdrawal payoff is based on a percentage of what is in all of the cash accounts and security values on the withdrawal valuation date. >You may not be showing a reduction in your petty cash balance as part of the withdrawal, but whatever portion of that account was attributable to the withdrawing member (based on current ownership >percentage, not based on how much they contributed) was taken from another cash account.
Actually, you are both correct. What may be causing confusion is that when a club imports data from IClub where they had a separate “off the books” petty cash account, bivio preserves that and it works as Carolyn indicated. We always counsel clubs to remove any cash which is remaining in that account and deposit into regular “on the books” accounts.
There is no other way to create an “off the books” petty cash account in bivio. We follow the recommendation of Ira and Rip and others and provide for the accounting to work as Ira has described.
Laurie Frederiksen bivio Inc. At 07:14 AM 5/4/2009, you wrote: >They most certainly do get a portion of whatever is in the fund. Their withdrawal payoff is based on a percentage of what is in all of the cash accounts and security values on the withdrawal valuation date. >You may not be showing a reduction in your petty cash balance as part of the withdrawal, but whatever portion of that account was attributable to the withdrawing member (based on current ownership >percentage, not based on how much they contributed) was taken from another cash account. OK. now I'm confused. I thought that the Petty Cash account in Bivio is completely separate. It doesn't show up on the valuation statement at all. What's the difference between using the Bivio Petty Cash account or using an envelope with cash in it? If you enter a member payment and apply it to the Petty Cash account does it buy units? I didn't think so. And if no units are purchased and if the PC account is not part of the valuation how do members receive a portion upon withdrawal? I really do want to understand this. We always counsel clubs to remove any cash which is remaining in that account and deposit into regular "on the books" accounts. I think this is great advice but it doesn't address the initial question. I also wonder what they plan to do with a "slush fund" (petty cash account). Cherilyn J. Peay >OK. now I'm confused.
I thought that the Petty Cash account in Bivio is completely separate. It
doesn't show up on the valuation statement at all. What's the difference
between using the >Bivio Petty Cash
account or using an envelope with cash in it? If you enter a member payment and
apply it to the Petty Cash account does it buy units? I didn't think so.
And if no units are >purchased and if the
PC account is not part of the valuation how do members receive a portion upon
withdrawal?
Dear Cherilyn,
You are very correct in the way your petty cash account in bivio works. What makes it confusing is that everyone does not have the ability to have a petty cash account that works the same way as yours. Only clubs that have imported historical records that included one will have it. There is no way to create a new one. And, we recommend that those who do have it, close it out and stop using it.
This is a very good question. I asked them that too. Once we know, we can give them better advice on ways to account for it.
Laurie Frederiksen bivio Inc.
That is certainly clear. Thanks Laurie. At 09:17 AM 5/4/2009, you wrote: Only clubs that have imported historical records that included one will have it. There is no way to create a new one.Cherilyn J. Peay PO Box 1408 Bernalillo, NM 87004-1408 (505) 867-4379 (505) 867-4224 fax Shirley, > Our club has not had a petty cash fund, but would like to start one. < For what purpose do you want a petty cash fund? That would be the first question. One appropriate purpose would be to have physical cash on hand to pay for small expenses (such as stamps or copies), or to reimburse club members for such expenses. For example, the club treasurer could keep the petty cash in some sort of wallet or box. A separate bivio "account" could be used to track what's in the petty cash box. A club member who bought stamps (or whatever) could present a receipt and the club treasurer could reimburse the member from the petty cash box. (In bivio, an expense transaction would be recorded using the "petty cash box" account.) When funds run low in the petty cash box, cash could be withdrawn from the club's bank or broker and added to the petty cash box. (In bivio, a transfer transaction would be recorded from the bank/broker account to the petty cash account.) Alternatively, one or more members could contribute actual physical cash (the treasurer should issue a receipt) that would be added to the petty cash box. (In bivio, this would be recorded as member payments deposited to the petty cash account. DO NOT record this as a "fee" transaction.) There is no need for all members to contribute to petty cash, or for those who do contribute to all contribute the same amount. Of course, a club could also pay such reimbursements by check. But that might result in writing a lot of small checks. Avoiding such small checks would typically be the primary reason for maintaining a petty cash fund. Among bivio's "One Minute Treasurer" recommendations is another alternative that avoids both the need to write small checks and the need to maintain a cash box. Reimburse club members for small expenses with club units (rather than with cash or by check). That can be done as follows. Enter an expense transaction to record the expenditure. Then enter a member payment transaction in the same amount for the member being reimbursed. Use a separate "Reimbursements" account for both transactions. Use the date of the expenditure as the Transaction Date for both the expense and the member payment and *also* as the Member Valuation Date for the member payment. The two transactions will cancel each other out, leaving the Reimbursements account balance zero. The member payment transaction will add units (equal in value to the expense) to the member being reimbursed. Having trouble understanding how that works? Perhaps thinking of it this way will help. Imagine that a club member paid for some stamps, the club reimbursed them with cash, and the club member immediately invested that cash in the club (i.e., used the cash to purchase additional club units). -Jim Thomas Our club had a Petty Cash Fund listed since inception. It shows on the Valuation. We only keep about $20 in it and that is for either ‘Get-Well Cards’ or if the club closes down, the cash can be used to do the final mailing of paperwork to each member etc., etc.
Once, about 5 years before Bivio, I think we may have ordered a Pizza when we were doing the annual audit of the books.
Trust me, before Bivio, we earned it….
Myrelle McHale
From:
club_cafe@bivio.com [mailto:club_cafe@bivio.com] On Behalf Of Cherilyn J. Peay
Only clubs that have imported historical records that included one will have it. There is no way to create a new one.
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