Hello Seniors,
I am writing to inquire how the Admin/Accounts departments usually disburse advances to their staff for official travels and expenses. In my company, we had all staff open individual accounts in a regular semi-private bank, but now the bank is asking us to maintain a minimum balance of Rs. 5000. Therefore, I am seeking advice from fellow organizations to assist our finance department.
I understand you may suggest paying them from the office's corporate bank account. However, as we are an NGO, we cannot show credit transactions of any nature in our bank account.
How do you manage staff advance disbursements in your organizations? Any ideas and suggestions are most welcome! :)
Thanks, Vineeta
From India, Delhi
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17I am writing to inquire how the Admin/Accounts departments usually disburse advances to their staff for official travels and expenses. In my company, we had all staff open individual accounts in a regular semi-private bank, but now the bank is asking us to maintain a minimum balance of Rs. 5000. Therefore, I am seeking advice from fellow organizations to assist our finance department.
I understand you may suggest paying them from the office's corporate bank account. However, as we are an NGO, we cannot show credit transactions of any nature in our bank account.
How do you manage staff advance disbursements in your organizations? Any ideas and suggestions are most welcome! :)
Thanks, Vineeta
From India, Delhi
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Normally, when a person has to go on an official trip, he submits a claim for advance as per the destination and entitlement to the finance department. 75% of the amount can be deposited into his bank account based on his claim and shown as an outstanding advance. Once the individual completes his tour/duty, he should submit original documents like tickets and boarding passes within, say, 7 days. If the claim is not submitted, the Finance department should remind him, and at the end of the month, they can recover outstanding advances in cases where it is necessary. The claim can be worked out, and the balance paid/recovered after adjusting the advance. A clear policy on the submission of claims and drawl of advances can be made known to all employees for strict adherence. A monthly list of outstanding advances can be made to control outstanding dues.
From India, Pune
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From India, Pune
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Dear Vineeta,
When employees need to spend money for official reasons, imprest money is disbursed to them. Upon completion of office tours or meetings, they are required to submit the bills and refund any remaining balance to the accounts department. This practice is common in many companies, and imprest money is also known as petty cash.
Another method of covering expenses is instructing employees to use their credit cards for purchases. Upon providing expense details, the amount can be reimbursed to their salary accounts. Additionally, employees earn points by using their credit cards.
Ideally, your accounts personnel should have addressed this matter independently.
Thanks,
Dinesh Divekar
From India, Bangalore
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When employees need to spend money for official reasons, imprest money is disbursed to them. Upon completion of office tours or meetings, they are required to submit the bills and refund any remaining balance to the accounts department. This practice is common in many companies, and imprest money is also known as petty cash.
Another method of covering expenses is instructing employees to use their credit cards for purchases. Upon providing expense details, the amount can be reimbursed to their salary accounts. Additionally, employees earn points by using their credit cards.
Ideally, your accounts personnel should have addressed this matter independently.
Thanks,
Dinesh Divekar
From India, Bangalore
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"Another way of meeting the expenses is to tell employees to make purchases on their credit card. On submission of the details of the expenses, the amount can be credited to their salary account. Employees earn points since they spend through their credit card.
Won't meeting official company expenses through personal credit cards create problems with IT, especially if the amounts are large? I had a friend who would keep booking air tickets for his frequent traveler boss through a personal credit card. He was happy at the accumulation of points but got a shock when IT sent him a notice for heavy credit card payments."
From India, Pune
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Won't meeting official company expenses through personal credit cards create problems with IT, especially if the amounts are large? I had a friend who would keep booking air tickets for his frequent traveler boss through a personal credit card. He was happy at the accumulation of points but got a shock when IT sent him a notice for heavy credit card payments."
From India, Pune
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Dear Mr. Nathrao,
You have written, " had a friend who would keep booking air tickets for his frequent traveler boss through a personal credit card. He was happy with the accumulation of points but was shocked when the IT department sent him a notice for heavy credit card payments".
Two things are evident from the information you have provided. First, he did not use the credit card for his own travel. Secondly, he might have booked tickets for international flights. The government closely monitors international travels, which likely prompted the notice from the IT Department.
There is no issue if a moderate amount, say Rs 5,000 to Rs 10,000, is spent on the credit card occasionally, but it should not become a regular practice. Additionally, the original query pertained to imprest money or petty cash.
Thanks,
Dinesh Divekar
From India, Bangalore
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You have written, " had a friend who would keep booking air tickets for his frequent traveler boss through a personal credit card. He was happy with the accumulation of points but was shocked when the IT department sent him a notice for heavy credit card payments".
Two things are evident from the information you have provided. First, he did not use the credit card for his own travel. Secondly, he might have booked tickets for international flights. The government closely monitors international travels, which likely prompted the notice from the IT Department.
There is no issue if a moderate amount, say Rs 5,000 to Rs 10,000, is spent on the credit card occasionally, but it should not become a regular practice. Additionally, the original query pertained to imprest money or petty cash.
Thanks,
Dinesh Divekar
From India, Bangalore
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Getting a query from IT does not mean he is guilty. He just has to show details of reimbursement and that no amount of profit was earned by him.
From India, Mumbai
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From India, Mumbai
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Stop dealing with a bank that is making a stupid demand like that. Open salary accounts for your staff with a bank that is willing to offer zero balance accounts. Thereafter, use the accounts as you have done before.
From India, Mumbai
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From India, Mumbai
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"Getting a query from IT does not mean he is guilty. He just has to show details of reimbursement and that no amount of profit was earned by him.
The query may lead to unnecessary questioning. Produce this document or that document. Explain each transaction in your passbook.
The process is difficult because it is time-consuming, and mental attitudes are different when we land up in front of IT. It is always better to ensure you don't get any notice from IT."
From India, Pune
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The query may lead to unnecessary questioning. Produce this document or that document. Explain each transaction in your passbook.
The process is difficult because it is time-consuming, and mental attitudes are different when we land up in front of IT. It is always better to ensure you don't get any notice from IT."
From India, Pune
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What we do is that we opened a separate bank account and all imprest cash is deposited here.I am talking about account in hong kong.We request expenses for 6 mths
From India, Mumbai
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From India, Mumbai
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Hello Vineeta & Prakasini,
Are you both ONE person OR working in the same NGO? Vineeta raised the initial query & Prakasini gave a clarification today. Like other members suggested, any issues IF the Advance is given in Cash? And like Saswata Banerjee mentioned, just DUMP this bank. There are many Banks now which allow Zero-Balance accounts....at most, they would insist on Rs. 1000 Min balances. "I am talking about an account in Hong Kong"--NOW this IS confusing. Is this the MAIN account from where you get the Forex Inflows into the separate Indian account, and all imprest cash is deposited here AND it's from this Indian account that individual employees get their advances credited for official travels and expenses into their individual accounts in a regular semi-private bank? Please clarify/confirm. Or did I get something wrong here? And are these 'individual accounts in a regular semi-private bank' DIFFERENT from their Salary Accounts OR the same?
Regards, TS
From India, Hyderabad
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Are you both ONE person OR working in the same NGO? Vineeta raised the initial query & Prakasini gave a clarification today. Like other members suggested, any issues IF the Advance is given in Cash? And like Saswata Banerjee mentioned, just DUMP this bank. There are many Banks now which allow Zero-Balance accounts....at most, they would insist on Rs. 1000 Min balances. "I am talking about an account in Hong Kong"--NOW this IS confusing. Is this the MAIN account from where you get the Forex Inflows into the separate Indian account, and all imprest cash is deposited here AND it's from this Indian account that individual employees get their advances credited for official travels and expenses into their individual accounts in a regular semi-private bank? Please clarify/confirm. Or did I get something wrong here? And are these 'individual accounts in a regular semi-private bank' DIFFERENT from their Salary Accounts OR the same?
Regards, TS
From India, Hyderabad
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