Dinesh Divekar
Business Mentor, Consultant And Trainer
Saswatabanerjee
Partner - Risk Management
Tajsateesh
Recruitment/talent Acquisition, Career Counselling
Prakasini18
Project Management
+3 Others

Hello Seniors,
I am writing to you to inquire how Admin/Accounts departments usually disburse advance to its staff for their official travels and expenses? In my company we had all staff open individual accounts in a regular semi private bank, but now bank is asking us to maintain a minimum Rs.5000 balance. So I thought of helping our finance department by seeking advice from fellow organizations.
I know you will say that, pay them from office's corporate bank account. But we cant do that since we're an ngo and cant show credit transactions in our bank of any nature.
How do you guys manage staff advance disbursements? Any ideas and suggestions are most welcome! :)
Thanks,
Vineeta
20th July 2015 From India, Delhi
Normally when a person has to go on official trip,he submits a claim for advance as per destination,entitlement to finance department.
75% of the amount can be deposited in his bank a/c based upon his claim and shown as outstanding advance.
Once individual completes his tour/duty he should submit original documents like tickets,boarding pass within say 7 days.
If claim is not submitted the Finance department should remind him and at end of month can recover o/s advance in cases where it is necessary.
Claim can be worked out and balance paid/recovered after adjusting advance.
Clear policy on submission of claim,drawl of advance et can be made known to all employees for strict adherence.
Monthly list of o/s advances can be made out to control o/s dues.
20th July 2015 From India, Pune
Dear Vineeta,
When employees are due to spend money for some official reasons, imprest money is disbursed to the employees. On completion of office tour or meeting the expenses, they are supposed to submit the bill and refund the balance to the accounts department. This is what happens in most of the companies. Imprest money is also called as petty cash.
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, amount can be credited to their salary account. Employees earn points since they spend through their credit card.
In fact your accounts personnel should have solved this on their own.
Thanks,
Dinesh Divekar
20th July 2015 From India, Bangalore
"""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, amount can be credited to their salary account. Employees earn points since they spend through their credit card.""
Wont meeting official company expense through personal credit card create problems with IT,especially if amounts are large?
I had a friend who would keep booking air tickets his frequent traveller boss through personal credit card.
He was happy at accumulation of points but got a shock when IT sent him a notice for heavy credit card payments.
20th July 2015 From India, Pune
Dear Mr Nathrao,
You have written that "I had a friend who would keep booking air tickets his frequent traveller boss through personal credit card.
He was happy at accumulation of points but got a shock when IT sent him a notice for heavy credit card payments
".
Two things are evident from the information that your have provided. One is that he did not use the credit card for his own travel. Secondly, he might have booked tickets for international flights. Government is monitoring closely the international travels. Hence the notice by the IT Department.
Nothing wrong if some Rs 5-10 thousand are spent on the credit card and it should not be regular practice as such. Secondly, the query was about the imprest money or petty cash.
Thanks,
Dinesh Divekar
20th July 2015 From India, Bangalore
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.
20th July 2015 From India, Mumbai
Stop dealing with a bank which is making a stupid demand like that.
Open salary accounts for your staff with a bank that is willing to give zero balance accounts. Thereafter use the accounts as you have done before

20th July 2015 From India, Mumbai
""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 pass book/s.
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 dont get any notice from IT.
21st July 2015 From India, Pune
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
21st July 2015 From India, Mumbai
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 the most they would insist on Rs. 1000 Min balances.
"I am talking about 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? Pl 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?
Rgds,
TS
21st July 2015 From India, Hyderabad
TAKE A 10000/5000 AS ADVANCE IN YOUR NAME in ACCOUNT/PAYEE & YOU CAN USE IT via ATM or KEEPING CASH with YOU. ..AS THE AMOUNT REACHES 10000/5000 YOU CAN SUBMIT THE BILLS TO ACCOUNTS & GET THE MONEY AS EXPENSES MADE...AGAIN YOU WILL HAVE 10000/5000 IN YOUR ACCOUNT...IT IS SIMPLE.. YOU CAN KEEP TRACK EITHER EXPENSES MADE or via YOUR BANK ACCOUNT or IN EXCEL.. ALSO
22nd July 2015 From India, Rajula
I AM SR.EXECUTIVE - F&A - at RAJULA PORT of PIPAVAV YOU CAN CONTACT ME ON MOBILE + 91 - 09727777047
22nd July 2015 From India, Rajula
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