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Riphah International University

Cash Management Policy

Group Members: Zain Ali Shah WaleedJanjua FaizanYaseen

disbursing and investing cash. it is important to establish guidelines that govern how money is spent. For example. . As part of the preparation of the policy. and strengthen its financial stability. this means having a process for receiving payments. as well as to the process of effectively managing a household budget. and avoiding the possibility of late fees and penalties. One of the first steps in developing a workable cashmanagementpolicy is to set up specific procedures for managing funds as they are collected. this means identifying a percentage of the total income received during a specific period and allocating it to savings or some type of investment endeavors. The policy will often include instructions for posting and recording the collected revenue within a timely manner. ensuring that there is some benefit throughout the budget period. an activity that over time helps to build cash reserves for use during emergencies. For businesses. but also how and when money is saved. posting them to the accounts receivables of the business and making sure those funds are deposited into the appropriate company bank account. the cashmanagementpolicy will usually address the procedures for allocating funds for specific purposes. Within the context of those allocations. if an annual budget allocates a fixed amount of funds for the purchase of potato chips. By building this component into the overall cashmanagementpolicy. writing a policy that speaks to the needs of the company or other organization is extremely important if the business is to meet its goals. allowing the business to make use of those funds for paying its own bills on time. For this reason. specific checks and balances must be put into place that help to control how those funds are spent over the course of the budget period. A cashmanagementpolicy not only addresses how and when money is spent. Developing a specific cashmanagementpolicy is very important to just about any type of business or organization. a company or household can save at least a little money. The goal here is to consistently put aside cash in some sort of interest-bearing venture. Typically. the policy may be to allow for the purchase of only a certain amount of chips per calendar month. After the funds are properly recorded.What is Cash management policy: Cash management policies are strategies that make it possible to effectively control the process of collecting. Doing so helps to prevent exhausting all the funds allocated to the line item at one time. how it is saved. and how it is invested.

such as maintenance of accounts receivable. p. Credit shall be extended only when authorized by a designated official who is aware of the Department's debt management policies. y.Cash Management Policies: a. Cash related duties. Deposits shall be processed within prescribed intervals and reconciled against records of funds received. Provisions shall be made for the regular review and comparison of transaction documentation to detect errors and duplicate payments. z. s. accounting. Cash related transactions shall be recorded promptly during each step of the cashhandling function. or circumvent. Only properly designated employees shall handle imp rest funds. Cash related accounts shall be frequently reviewed and reconciled with subsidiary records. disbursing. n. r. Electronic funds transfer and direct deposit shall be used where feasible and advantageous. Cash held outside the Treasury shall be maintained at the minimum amount needed to cover current transactions. x. and cash shall be reconciled daily. Cash disbursement transactions shall be processed promptly. o. i. Cash transactions shall not be used to substitute. j. Prompt responses shall be made to reviews performed by the Office of Inspector General and the Government Accountability Office on cash management activities to correct cited deficiencies. Unnecessary clerical routines and handling of cash or cash related documentation shall be eliminated to lessen the risk of loss and exposure to errors. The approval of adjustments to cash related transactions shall be administratively controlled. m. tampering. q. b. f. d. Documents used in cash related transactions shall be safeguarded against re-use. Computer edit programs shall be used to the maximum extent possible to disclose or reduce the incidence of error in cash related transactions. or unauthorized disposal. w. and collecting funds shall be segregated. t. g. and collection duties. c. The accessibility to funds and fund records shall be restricted and administratively controlled. v. Supervision of cash management activities shall be strictly and continually administered. l. disbursement certifications. Checks received in collections shall be endorsed upon receipt and collections shall be safeguarded until deposit is accomplished. The time-value-of-money shall be recognized as a part of each cash management decision. e. Serially numbered forms shall be used to document cash related transactions to enhance reconciliation and accountability. h. . Approved price lists shall be published to ensure a control over income for goods and services. cashiering. Cash derived from collections and cash used for disbursements shall not be commingled. Cash related transactions shall occur only after the approval of an individual with delegated authority to make approvals. Cash related transactions shall be fully documented so that an undisputable audit trail exists. u. Employees assigned cash related duties shall be trained and must accept their responsibilities. prescribedprocurement approvals and procedures. k.

The Finance officers are responsible for approving and embossing all changes to petty cash funds and establishment of petty cash funds. 3. establishing of petty cash fund or replenishment of the fund. All petty cash expenditures must be supported by a petty cash voucher slip and a receipt.Petty cash: POLICY 1. 12. Petty cash may not be used for the following: a. The responsible department must notify the Office of the Treasurer when there is a change to the petty cash fund. Reimbursement of entertainment expenses of 5000 rupees or less may be made from the departmental petty cash funds. 6. 15. A custodian can only be responsible for one petty cash fund. The Office of the Treasurer in consultation with the Cashier¶s Office is responsible for approving and controlling all petty cash funds. 13. Human Subject fees of 10. purchase of supplies in excess of 5000 rupees. 10. The amount of the fund should be limited to the total of two week¶s expenditures.All petty cash funds must be replenished at least on a monthly basis and original receipts and voucher slips must accompany all reimbursement requests. 5. The petty cash voucher slip must be approved by the custodian and signed by the recipient of the cash. The voucher slip and receipt must be submitted along with the request to replenish the fund.000 rupees or less per subject may be made from the departmental petty cash funds. 2. 11. 4. The custodian cannot approve and emboss changes to petty cash. 14. . The individual with appropriate authorization via his/her transaction authorization card is responsible for ensuring that all expenditures from petty cash are in compliance with company petty cash policy.

The Cashier¶s Office will give credit for the written amount of the check . 11. All cash and checks received must be deposited with the Cashier¶s Office on the day of receipt. checks are signed b. consistent with financial . numeric amount and the written amount are consistent. 8. 6. 11. Cash or checks received over the weekend must be retained in a secured location and deposited the next business day. Deposits that include 2000 rupees or more in coin must be on a separate deposit and must not have any other currency (cash/checks) included on the deposit. 5. Depositors must limit their deposit to 100 checks per deposit. 15. 2. check dates are not post dated c. Depositors must include an adding machine tape. 3. Deposits that include a foreign check must be prepared on a separate deposit and must not have any other payments included on the deposit.Cash in hand: PURPOSE To establish sound cash management practices and safeguards cash receipts against theft or loss. Cash Depositors must hand deliver the deposit to the Cashier¶s Office and must wait for a receipt from the cashier. POLICY 1. 13. It is the responsibility of the Financial Administrator to reconcile deposit accounts on a monthly basis. Depositors making a cash deposit will not receive cash back from a deposit. Depositors must ensure that checks are prepared accurately. Depositors must endorse checks immediately with their department endorsement stamp. This includes: a. Departments will be charged a returned check fee for any check that is returned unpaid for any reason. 9. Depositors cannot exchange cash deposits with a personal check. 7. 4. 10. 12. Depositors must notify the Cashier¶s Office if they do not receive an electronic receipt within two business days.

2. administering and closing all bank accounts of the Company.Cash at bank: PURPOSE The Treasurer may authorize the use of separate bank accounts by certain departments when operational constraints warrant this action. If no response and/or reconciliation is received within 5 business days. The Office of the Treasurer will sign and tickmark its review of the reconciliation. the Associate Treasurer will notify the custodian in writing of the outstanding request. 9. Separately administered bank accounts are to be used only for their intended purpose and are not to be used as a depository for cash receipts or as a check cashing fund except as otherwise approved by the Office of the Treasurer. and (b) the monthly reconciliation between the accounting system and the bank statement. 6. The monthly bank reconciliation must be submitted to the Office of the Treasurer for review and approval. one of which must be the Vice President for Finance and Treasurer. unless otherwise arranged with the Office of the Treasurer. The Office of the Treasurer is responsible for establishing.All reconciliations are due to the Office of the Treasurer by the 15th working day of the month.Each check written in the amount of 5000000 rupees or more must have two signatures. All checks must have two authorized signatures. POLICY 1. . 4. 13. 5. 14. The Business Officer of the company or administrative area is responsible for approving all requests for separate bank accounts and assigning custodians for such accounts. Associate Treasurer or Executive Director of Risk Management. All authorized signatories must be approved by the Office of the Treasurer. 7. 8. The custodian of the fund is responsible for (a) the fund¶s safeguarding and security. 12. All separately administered bank accounts must be replenished at least monthly and original receipts must accompany all reimbursement requests. 3.The Assistant Cash Manager will notify the Custodian in writing if the reconciliation is not received in a timely matter. All requests for reconciliation that are not received within 15 business days of their due date will be reported as delinquent to the Vice President for Finance and Treasurer and the actions to close the account will be taken.

.15Any accounts that remained unreconciled for more than one reporting period will be closed by the Officer of the Treasurer.