PCF Policy

GLOBAL VISIONS EVENTS AND MARKETING NETWORK, INC.
Document No. ____________________

Subject: CREATION, POLICIES AND GUIDELINES ON PETTY CASH FUND & REVOLVING
FUND
Department: ALL EMPLOYEES
I. OBJECTIVES
a. To promulgate policies and guidelines in handling PETTY CASH FUND AND

REVOLVING FUND to effectively control and safeguard cash and for proper
monitoring as part of the internal control measures of the Company;
b. To establish responsibilities and accountability in handling physical amount of
such funds;
c. To establish accounting policies and procedures in creation, replenishment
and derecognition of Petty Cash Fund and Revolving Fund.
II. CUSTODIANSHIP
A Petty Cash Fund (PCF) amounting to FIVE THOUSAND PESOS (P10, 000) is hereby set up to
enable departments to make emergency purchase and take care of minor disbursements
where a purchase order is not cost effective or impractical, consisting of day-to-day expenses
amounting to not more than ONE THOUSAND PESOS (P1, 000).
A Revolving Fund (RF) amounting to FIFTY THOUSAND PESOS (P50, 000) is hereby set up for
payment of operational expenses not exceeding P10, 000. The RF may also be used for other
minor disbursements exceeding the PCF limit of P1,000 but not more than P10,000 provided
however that the disbursement is limited to the following:
a) When the payee does not accept checks;
b) Where the disbursements is for payment of labor costs to each worker in a project
payroll;
c) For payment of food, drinks and other incidental expenses during meetings,
production & delivery activities, after-office-hours staff work, and other similar
group activities
d) For disbursement of cash advances for travel and other minor expenses
e) For other transactions where cash is the mode of payment that is most practical,
convenient and beneficial to the Company.
The funds are established at the time of approval and shall be maintained on imprest system.
At any given time, the total cash on hand and the un-replenished disbursements should be
equal to the amount of the fund. Expenditures must be within the policy and it may not be
used to circumvent current and existing purchasing procedures.
The RF shall be in the custody of the Cashier or, in the absence of the cashier, the designated
custodian; while the PCF shall be in the custody of the Administrative Officer or the
designated custodian. Access to and responsibility for each of the funds is limited to the
respective custodian who shall be under the supervision of the Finance Manager only in as
far as their custody of funds is concerned.
Each fund is kept separately and should never be mixed together.
III. REPLENISHMENT
The Petty Cash/Revolving Fund contains request for reimbursement/replenishment when the
funds run low and insufficient to cover petty expenses or revolving fund disbursements.
Custodian is required to request for replenishment every week or once 50% fund balance was
reached whichever comes first so as not to deplete the fund. For the PCF, the replenishment
point is P5, 000. For the RF the replenishment point is P20, 000 or as an actual needs to
replenish arise. It should always available and must not run out of cash. If it so happens, the
custodian shall justify and be subjected to investigation by internal auditor.
The Treasurer shall release the replenishment funds based on the Disbursement Voucher duly
approved by the Finance Manager and supported by duly audited Replenishment Summary
for PCF or RF, as the case may be, together with the duly approved PCF/RF Vouchers. Check
Disbursement Vouchers for the replenishment must be approved accordingly based on the
amount.
The RF and the PCF may be replenished by the Treasurer every end of the month regardless
of the amount disbursed for purposes of matching income and expenses monthly through
preparation of the income statement.
The replenishment check should be payable to the fund custodian.
IV. DUTIES OF THE CASH CUSTODIAN
a) The custodian is responsible at all times for the appropriation and safekeeping. Fund
shall be secured in a locked device or vault, and should not be commingled with
personal and any other funds.
b) He shall keep accurate records of the fund. PCV/ RV shall be properly monitored and
accounted.
c) He shall be personally accountable for the fund until all the funds/ or valid receipts
have been audited by Internal Audit and account closed by Accounting Department.
V. REGULAR CASH COUNT OF THE FUNDS
The Cashier/ Custodian daily ensures the cash per count sheet tally with the cashbook,
witnessed and verified by his superior/ Manager.
VI. ACCOUNTING PROCEDURES FOR PETTY CASH FUND AND REVOLVING FUND
The imprest fund system is the one usually followed in handling petty cash and revolving fund
transactions. The pertinent accounting procedures are:
a) A check is drawn to establish the fund. The check is given to the petty cashier or any
responsible officer.
Petty cash fund/ Revolving Fund XX

Cash in Bank XX
b) Payment of expenses out of the fund- No formal journal entries are made. The petty
cashier generally requires a signed petty cash voucher for such payments and simply
prepares memorandum entries in the petty cash journal.
c) Replenishment of petty cash payments- whenever the petty cash fund runs low, a
check is drawn to replenish the same. The replenishment check is usually equal to the
petty cash disbursements. It is at this time that the petty cash disbursements are
recorded as follows:
Appropriate Expense Account XX

Cash in Bank XX
It is to be pointed out that the petty cash and revolving fund disbursements should be
replenished only by means of check and not from undeposited collections.
d) At the end of the accounting period, it is necessary to adjust the unreplenished

expenses in order to state the correct petty cash balance as follows:
Appropriate Expense Account XX

Petty Cash Fund/ Revolving Fund XX
The adjustment is to be reversed at the beginning of the next accounting period so

that the normal replenishment procedures may be followed by simply debiting expenses and
crediting cash in bank without distinguishing whether the expenses pertain to the current
period or prior period.
e) An increase in the fund is recorded as follows:

Cash in Bank XX
f) A decrease in the fund is recorded as follows:
Cash in Bank XX
VII. ACCOUNTABLE FORMS (Petty Cash Voucher / Revolving Voucher)
a) A Petty Cash Voucher (PCV) is required for disbursement from the Petty Cash Fund
(Refer to ANNEX A)
b) Revolving Fund Voucher (RFV) is required for disbursement from the Revolving Fund
(Refer to ANNEX B).
c) Request for Reimbursement (Refer to ANNEX C)
d) Replenishment Report for Petty Cash/ Revolving Fund (Refer to ANNEX D)
e) Cash Count Sheet (Refer to ANNEX E)

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GLOBAL VISIONS EVENTS AND MARKETING NETWORK, INC.

Document No. ____________________

a. To promulgate policies and guidelines in handling PETTY CASH FUND AND

a) When the payee does not accept checks;

Each fund is kept separately and should never be mixed together.

The replenishment check should be payable to the fund custodian.

IV. DUTIES OF THE CASH CUSTODIAN

Petty cash fund/ Revolving Fund XX

Appropriate Expense Account XX

d) At the end of the accounting period, it is necessary to adjust the unreplenished

Appropriate Expense Account XX

The adjustment is to be reversed at the beginning of the next accounting period so

e) An increase in the fund is recorded as follows:

Petty cash fund/ Revolving Fund XX

VII. ACCOUNTABLE FORMS (Petty Cash Voucher / Revolving Voucher)

c) Request for Reimbursement (Refer to ANNEX C)

d) Replenishment Report for Petty Cash/ Revolving Fund (Refer to ANNEX D)

e) Cash Count Sheet (Refer to ANNEX E)

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