SIMPLE BOOK KEEPING RECORDS This document was produced by Diane West www.dijest.net for GAVS, funded by the Royal Borough of Greenwich. No responsibility is taken for the accuracy and content of the document which was revised in March 2014. If you have any further questions after you have read these documents, please contact GAVS at 020 8858 1363 or [email protected] This document gives examples of the following accounting records: Simple budget preparation Cash received book Cash paid book A sample Payment Authority Voucher Petty cash book Bank Reconciliation Budget Comparison Account Balance sheet BUDGET The XX Charitable Association applied to the Royal Borough of Greenwich for a grant of £30,000 for one year. The application was based on the following budget. Estimated Income £ £ Income from mother tongue classes 1,000 RBG – One off grant 4,000 RBG – running cost grant 26,000 Total estimated income 31,000 Estimated Expenditure Furniture and Equipment (One off) 4,000 Salary for one worker 16,000 Employer’s National Insurance 1,670 Staff recruitment advertising 900 Rent, rates, light and heat 2,400 Telephone and postage 600 Printing and stationery 500 Publicity 430 Travel Expenses 640 Insurance 200 Training and conferences 500 Mother tongue classes 2,000 Bank Charges 80 Audit fee 400 Other sundry expenses 680 27,000 Total estimate expenditure 31,000 £4,000 of the grant was a once-off ‘capital’ sum needed by the project to purchase furniture and equipment. The balance of £26,000 was required to cover ongoing expenditure. CASHBOOK The cashbook is a record of all receipts and payments of an organisation. All receipts both cash and cheque should be recorded in the cashbook and paid into the bank. All payments, which are normally made by cheques, standing orders, BACS or direct debits, should be recorded in the cashbook. CASH RECEIVED should be paid into the bank; expenses should never be paid out of cash receipts. CASH PAYMENTS: Payments should always be made by cheque or BACS transfer where possible. Occasionally someone may insist on being paid in cash, for example a builder who has carried out small repairs on the building. A cheque for this amount can be cashed at the bank and this payment should be entered in the cashbook under the repairs column. Then file the builder’s invoice with the voucher (cheque requisition) for the cheque payment. Cash book recordings should be analysed under appropriate headings to provide more information on money received and payments made. The Cash Analysis book gives detail, with columns for Date, Details and the different categories e.g. grants, bank interest received, salaries, printing and rent. All documents relating to income i.e. remittance advice with cheques and or letters from grant making bodies should be filed as proof of income. All invoices should have the cheque number written on them along with the date and should be filed according to the cheque number and by month a) The Cash Received Analysis Book CASH RECEIVED ANALYSIS BOOK One-off Revenue Income from Income from Date Details Ref. No Total Donations Grant Grant Classes fund raising £ £ £ £ £ £ 02/04/2007 RBG Once off 2221 4,000.00 4,000.00 RBG Revenue Q1 2221 6,500.00 15/04/2007 Income from classes 2222 60.00 60.00 16/04/2007 Income from donation 2223 100.00 100.00 28/04/2007 Jumble Sales 2224 220.00 220.00 Total 10,880.00 4,000.00 6,500.00 60.00 100.00 220.00 b) Cash paid Analysis Book CASH PAID ANALYSIS BOOK Staff Rent, Printing, Mother Furniture & Salaries & recruitment Rates, Light Telephone Stationery Audit & Travel Training & Tongue Bank Petty Sundry No. Cheque Date Details Ref. Total equipment NI Advertising & Heat & Postage & Publicity Insurance Expenses Conferences Classes Charges Cash Expenses £ £ £ £ £ £ £ £ £ £ £ £ £ £ 04/04/2007 Petty Cash 250 50 50 06/04/2007 The Voice-Job Advert 251 250 250 Guardian-Job Advert 252 300 300 GLS Furniture & Equipment 253 3,700 3,700 07/04/2007 The Gazette-Job Advert 254 100 100 10/04/2007 Trojan Ltd-Printing 255 60 60 11/04/2007 Stacy Ltd-Stationery 256 30 30 12/04/2007 Borough of Greenwich 1st Charge R 257 600 600 Co-operation-1Year 258 200 200 14/04/2007 CAP Training costs 259 40 40 26/04/2007 Ms Hasibe Ali Salary-1 Month 260 940 940 30/04/2007 Inland Revenue Tax & NIC 261 530 530 Worker Electric Ltd-Sundry 262 10 10 Petty Cash 263 45 45 Total Payment for April c/c 6,855 3,700 1,470 650 600 - 90 200 - 40 - - 90 10 Year to Date (YTD) c/c 6,855 3,700 1,470 650 600 90 200 40 90 10 PAYMENT AUTHORITY VOUCHER Date of Invoice: 1/7/07 Invoice Details Telephone charges for quarter ending June 2007 Amount £200 Expenditure heading: Telephone Expenditure code (if applicable) Project: Admin Authorised by: Approved by Please print name in full Please print name in full To be completed by those signing cheques Cheque number: 1234 Date cheque drawn 7/7/07 Amount of cheque £200 Detail of people who signed the cheque: Office Manager Please print name in full Treasurer Please print name in full PETTY CASH SYSTEMS Many organisations simply withdraw some money from the bank and put it in a tin. Payments are then made out of it and when the cash is getting low, some more money is drawn and put in the tin. Although there is nothing wrong with this method it is very easy to lost track of how much money there should be at any one time There is also the tendency to put off writing up the petty cash book or filling in the vouchers and this is when things start to go terribly wrong. One of the best ways of keeping control of the petty cash is the IMPREST SYSTEM. First of all decide how much of a float you are likely to need – say £50 and withdraw this from the bank. Enter the cheque details in the cashbook under the petty cash column. From now on you are working to the fixed sum of £50 (or whatever your float is) Whenever money is paid out a receipt or petty cash voucher should be put in the tin. This means that at any time there would be a total of £50 made up of cash and the collective sum of receipts in the tin, which makes it very easy to check. Always obtain a receipt for any money paid out of the tin and attach it to a petty cash voucher. Even if a receipt is not available (e.g. tube or parking ticket) a signed petty cash voucher should still be completed with full details of the claim. A receipt can take the form of an email verification or an Oyster card travel journey report. Each petty cash voucher is given a sequential number and date as it is entered in the book and this is used to order them in the filing system All claims must be signed and then authorised by someone else. All payments should be entered and analysed in the Petty Cash Book. This should be done any time you need to draw more money from the bank. Ideally one person should operate the petty cash system at any one time. If this is to be handed to someone else the cash and voucher should be counted and agreed by both of them Use a lockable cash box and ensure it is kept in a secure place. On the last day of the financial year, count the cash with a witness and sign a confirmation. This will be needed for your year end accounts. a) The Petty Cash Analysis Book PETTY CASH ANALYSIS BOOK INCOME F/Raising Date Details Chq Ref. Total Date Details Ref Total Travel Exp. Postage Expense Sundry Expenses £ £ £ £ £ £ 04/04/2007 Cash from Bank 250 50 06/04/2007 Hasibe Ali-Travel Expense 1 3.00 3.00 07/04/2007 Coffee & Milk 2 4.00 4.00 09/04/2007 P.O. Stamps 3 6.00 6.00 21/04/2007 Hasibe Ali-Travel Expense 4 5.00 5.00 28/04/2007 Jumble sale-Expenses 5 20.00 20.00 29/04/2007 Cash from Bank 263 45 29/04/2007 Hasibe Ali-Travel Expense 6 7.00 7.00 - Total Expense c/c 45.00 15.00 6.00 20.00 4.00 Cash in Hand Not yet spend 50.00 95 95.00 Year to Date (YTD) 95 c/c 45.00 15.00 6.00 20.00 4.00 BANK RECONCILIATION STATEMENT £ Money we started with (opening balance) Nil Add the money banked during April 10,880.00 Less the cheque payments for April 6,855.00 Equals Cash Book (closing) Balance at 30th April 4,025.00 Bank Reconciliation Statement at April 30th 2007 £ Balance per Cash Analysis Books: Balance at start of April Nil Add: Total of bank deposits in April 10,880.00 Less: Total of payments in April 6,855.00 Balance per Cash Analysis Books 4,025.00 Compare To: Balance per Bank Statement 4,345 Add: Deposits not shown on statement Date Details 28/04/2007 Jumble sale 220 Less: Uncleared cheques Date Details Chq No. £ 30/04/2007 Inland Revenue 261 530 Workers Electric 262 10 - 540 Adjusted bank statement balance 4,025.00 INCOME AND EXPENDITURE VERSUS BUDGET Income and Expenditure Account and Budget Comparison for April 2007 £ £ £ Actual for Favourable / Income the month Budget (unfavourable) Grant: RBG - one off 4,000 4,000 - Grant RBG - 1 month 2,167 2,167 - 6,167 6,167 - Income from Classes 60 83 - 23 Income from donations 100 - 100 Income from fundraising 220 - 220 Total income 6,547 6,250 297 Less: Expenditure Furniture & Equipment 3,700 4,000 300 Salaries and N.I.