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Credit Cards, Petty Cash Receipts, Bank Account Records - Coursework Example

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The paper "Credit Cards, Petty Cash Receipts, Bank Account Records" is a good example of finance and accounting coursework. The credit cards are very efficient, quick and appropriate means of making purchases by the members in this organisation. They allow the members to have personal access to alternative and efficient means of payment for their purchases…
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Name Course Lecturer Date Financial Management Processes Credit Cards The credit cards are very efficient, quick and appropriate means of making purchases by the members in this organisation. They allow the members to have personal access to alternative and efficient means of payment for their purchases. They also help the members with payment for strictly business related and approved expenses as well as supplies. On the other hand, the credit cards improve reporting for managerial and control purposes in relation to credit cards and purchases. By this, they provide efficiency in purchases (Chakravorti, Sujit& Ted,2007: 587). They are not only efficient but also reduce costs related to processing of purchases and payables. However, it is important to ensure that the credit cards are used by the right person, for the right purpose and for the right payment. As such, some measures are important in order to ensure compliance. The credit cards should only be issued to the members only with the approval of the facilities manager in conjunction with the finance manager. This is very essential as it will avoid dishing pout credit cards to persons who are not supposed to have the credit cards. It is very important for the two managers to ensure that they code the credit cards so that only the owner of the card can use the card. The coding must only be known to the owner only. This would avoid theft of the credit card, it will ensure that the holders of the credit cards becomes responsible, this is after knowing that they cannot use any other credit card to make purchases (Bernthal, et al., 2005: 137). In addition, the credit cards should specify the department of which each and every member is from. Another improvement of the credit cards is to ensure that they can only be for the specific purpose for which they are intended. The credit cards should only be used for business purposes only, the providers of the credit cards should ensure that the holders of the cards do not misuse them by making purchases out of business. To ensure that the members comply with this measure, the departments should ensure that they scrutinise the credit card balances by providing statements of how the members are using the credit cards (Heydt-Benjamin, Thomas, et al., 2007: 8). This will hold the members responsible and ready to defend their usage of the cards. Failure to comply with this should attract strict punishment; the departments should block any purchase that is not business related. They should not allow personal usage or personal purchases by the members. The members should not be given cash advances on the credit cards. The finance and facilities manager should ensure that it is not possible in the organisation to give cash advances on the credit cards. If there is any cash to be given on the credit cards, it should be approved by at least two persons in the facilities and finance departments. The respective managers should be the final authority to permit cash advance on the credit cards (Zinman, Jonathan, 2009: 363). Without their permission, cash advance should not be given. Moreover, cash should only be given only on special situations that are not possible with the credit cards. It is very easy to use cash for personal payments unlike the credit cards. It is difficult to regulate the use of cash in respect to payments for purchases. This is because the members can make purchases any other place while with credit cards it is only possible for the designated places only. Another improvement on the card holders is to require the cardholders to enter in to an agreement and sign it. The agreement should indicate the member’s acceptance to use the credit card. It should also include agreement that the cardholder has agreed to use the credit card according to the terms and conditions as set by the organisation. Any member found to contravene the terms and conditions should be ready to face the consequences. The members who do not adhere to the procedures and policies of the credit cards risk provocation of their credit cards especially the privileges that comes with the credit cards,disciplinary action follows. To enhance control of the credit cards, there should be rating on the usage of the cards (Hayhoe, Celia, et al., 2005: 98). This should serve as a warning to members who use their credit cards recklessly. To be issued with a credit card, the members must use a written request form. The request forms should in the custody of the finance manager. Additionally, there should be detailed receipts of all the transactions that take place with the credit card. They should be attached to the credit card statement. They are very good evidence of how the members use the credit card. The statements should include the date, receipt number, time as well as the name of the member involved in the transactions (Zinman, Jonathan, 2009: 258). The receipts should be able to have a brief description of the business and purpose of purchase. This will not only comply with the policies and procedures of the credit cards but also the taxation requirements. This makes it easy and quick to process the taxation due from the organisation. The computation of taxes becomes easy and transparent. There should be monthly statements accompanied with the respective receipts. These receip0ts and statements should be submitted to the purchases department for verification. After verification, they should be taken to the finance manager to counter check the usage of the credit card against the purchases in the statement and receipts. This would provide further evidence and will also be very useful on the credit card rating. The statements should include full details of the cardholder, the signature of the staff member approving it as well as the date when the statement is approved. The persons approving the statements should include their names as well. Before they are submitted for payments, the monthly statements should include the respective appropriate account number (Park, Hye-Jung & Leslie,2005: 137). The account number should also indicate the associated amount. Essentially, the above measures will improve the procedures and policies of the credit cards. The members using the credit cards will be under scrutiny and will be required to observe the measures as well. Petty Cash Receipts The organisation indicates to have good internal procedures and control of the petty cash. The account balances agree with e custodial records as per the information provided. Despite the good internal control procedures of the petty cash, there needs to be made some improvements in order to make petty cash control adequate. Some of the area to improve on the petty cash is the paid receipts as they are not marked as paid. This provides room for reuse. Another area for improvement is reducing the checks, duration the checks should be weekly. The check period is substantially longer and this allows for errors and frauds to happen. The errors and mistakes become uncontrollable when they occur. Notably, the petty cash fund levels should not exceed the funds level needed. This is a very crucial are in relation to petty cash regulation and therefore the members responsible for the disbursement of the petty cash funds should ensure that they do not give petty cash fund levels that exceed the funds level needed (Council, 2009: 49) The funds that exceed provide an opportunity to the responsible staff to use the cash for their personal use. This is against the policies of the organisation. There is evidence of little guidance as to the utilisation of the petty cash funds. This is because there is no daily oversight on the usage of the petty cash funds. The staff responsible for the petty cash is allowed to use the funds without proper control (Council, 2009: 23). The presence and use of the credit cards should reduce the use of petty cash funds. This translates to decrease on the petty cash funds; however, the petty cash does not indicate the same. The petty cash funds should not be disbursed before the previous funds have been accounted for. The report on the usage of the previous petty cash funds should first be reviewed in order to indicate if the funds are used for the right purpose and every dollar is accounted for (Stott, Randall, et al., 2010: 78-85). This will include the statements and receipts. The reimbursements for minorpayments should be accomplished by creating funds needing that checks issued occasionally to refill the fund agree with the amount of expenditure from the fund. These measures will improve the petty cash receipts and usage of the petty cash funds. I would ensure that the petty cash receipts are in agreement with the petty cash funds disbursed. Bank Account Records It is not only important to keep and maintain the records of the organisation but also a requirement to maintain the records. As such, the organisation has little option when it comes to keeping and maintaining the business records. These business records include the bank account records. The bank account records are provided by the bank as well as the organisation itself. The bank records provided by the bank should be in agreement with the bank records with the organisation. There should be reconciliation of the bank records with the organisations bank records. The reconciliation should be carried out by a staff with experience and expertise in the respective field. It should then be counter checked by the finance manager and conformed to the bank. The custody of the bank account records is crucial in order to avoid misappropriation (Srivastava, Abhinav, et al., 2008: 41). The amounts contained in the bank account records should be correct. The records provide evidence on the records with the organisation. The bank account records are also used for screening tax returns. The organisation should keep a paper trail of the bank account records. Whether the bank transactions were done online or through over the counter, the organisation should save these important documents. (Cohn & Simon, 2008: 158)The check book should also be maintained properly as it provides evidence on the records. In essence, the bank account records provide information on the organisation’s banking. The improvement on these records is on documentation and reconciliation. They play a major role in disclosing records with the organisation. This is because the organisation is prone to misappropriation of record, to fraud, error in maintain the records. I would ensure that all banking are documented are maintained in the right place. No staff should be allowed to access the records without the authorisation of the finance manager. Works cited Bernthal, Matthew J., David Crockett, and Randall L. Rose. "Credit cards as lifestyle facilitators." Journal of Consumer Research 32.1 (2005): 130-145. Chakravorti, Sujit, and Ted To. "A theory of credit cards." international Journal of industrial organization 25.3 (2007): 583-595. Cohn, Simon. "Petty cash and the neuroscientific mapping of pleasure."BioSocieties 3.2 (2008): 151-163. Council, C. Petty Cash Procedures, (2000): 43-56. Council, C. Sub Contractor Verification, (2009): 13-25. Hayhoe, Celia, et al. "Credit cards held by college students." Journal of Financial Counseling and Planning 16.1 (2005). Heydt-Benjamin, Thomas S., et al. "Vulnerabilities in first-generation RFID-enabled credit cards." Financial Cryptography and Data Security.Springer Berlin Heidelberg, 2007.2-14. Park, Hye-Jung, and Leslie Davis Burns. "Fashion orientation, credit card use, and compulsive buying." Journal of Consumer Marketing 22.3 (2005): 135-141. Srivastava, Abhinav, et al. "Credit card fraud detection using hidden Markov model." Dependable and Secue Computing, IEEE Transactions on 5.1 (2008): 37-48. Stott, J. Randall, et al. Basic accounting. Teach Yourself, (2010): 78-85. Zinman, Jonathan. "Debit or credit?." Journal of Banking & Finance 33.2 (2009): 358-366. Zinman, Jonathan. "Where is the missing credit card debt? Clues and implications." Review of Income and Wealth 55.2 (2009): 249-265. Read More
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