Help needed

Flying Scarlet

Hi all

I have been given the opportunity to gain a bit of experience in doing the books for a lunch club in my local area. The person (chairperson) gave me a book of recepits & payments along with a petty cash book.

The recepits & payments list all of the income generated from meals which pays the chef. So basically if they get £150 in meals, that goes to petty cash. The chef is gaurenteed (sorry can never spell that one) £120 per week so anything over that they keep as an excess. However if they take less than £120- money is taken out of Petty Cash to top the chef up.

The lady has asked me to ensure that everything balances & make it up to a P&L stage. Obivously my first stage is to start at the year begining & ensure all the double entires balance. But as they use their petty cash box as thier cash account do i take the amount in the box at the end of the financial year as the opening balance? I havbe confused myself over this but I really want to get this as experience.

Im happy with doing all the ledgers & then trial balance but am unsure of what the opening balance should be on the cash account.

Thanks

definite.studies

Hi Flying!

I think the information on the Cash Online website is very good advice in theory. What you have said about the club's use of petty cash for everything, sounds on the face of it like poor practice though.

The trouble I have found is that small clubs and charities just like everyone to rub along together with the minimum of fuss and disruption. Nobody is going to be that interested in following "correct" procedures and they think any suggested anti-fraud measures are just needless complication or an unjustified slur on their characters.

Perhaps by showing more tact than me other people have more positive experiences, so you shouldn't be totally discouraged.

Good Luck! DS.

welshwizard

Thanks for that website - it looks really interesting and some of the books look good too

definite.studies

Regarding the opening balance, I would treat the cash in hand at the start of the FY as the opening petty cash balance for the Cash Book. It is certainly not a cash receipt during the new period.

I was unsure whether there is bank account for the club as none was mentioned. Generally with community organisations it is thought best practice to bank cash receipts as soon as possible and pay all expenses including supplies and wages through the bank with cheques signed by two trustees, but whether this club is too small for this could be argued.

It would be worthwhile talking to the local Citizens Advice or Council for Voluntary Services to see if they have any recommendations. Probably the club would take their advice more seriously than something someone told you anonymously on a web site!