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Source Documents of Financial Transactions With a cash-basis accounting system, financial transactions are generally recorded only if cash is received or spent. The source documents may include the following: Cash Transaction Sources 1) Wire Confirmations 2) Vendor Invoices and Receipts 3) Field Bank Statements 4) Petty Cash Voucher 5) Checks drawn on Field Bank Account 6) Checks drawn on Home Office Bank Account 7) Employee(s) Expense Reports Non-Cash Transaction Sources 8) Notification of Home Office Purchases on Behalf of Field 9) Miscellaneous Adjustments Examples of Cash Transactions Sources Wire Confirmations – The most common source of wire confirmations is the notification sent to you after the Home Office transfers funds to your field banking account. This notification may be either the e-mail notification from the Home Office or your local field bank’s notification of deposited funds. Vendor Invoices and Receipts – Vendor invoices or receipts are the primary sources document for expenditures. As a general rule, no money should be paid to anyone unless an invoice has been presented or a receipt can be obtained. Home office acknowledges the difficulty in obtaining good, verifiable expense documentation in some developing nations. When third-party documentation is impracticable to obtain, field accounting staff should document the expenditure, provide a detailed explanation of the nature of the expense and have this approved by the appropriate person. The accounting staff should also note if this is a one-time or repetitive problem. Field Bank Statements – Bank interest income and bank service charges are the most common type of financial transactions noted on your bank statement. The Home Office expects you to reconcile your calculated ledger balance for field checking against your field bank account statement monthly. Reconcilable items, like outstanding checks, should be monitored. Petty Cash Voucher System – Many fields maintain some physical cash holdings in the office. Cash payments / receipts relating to these holdings should be documented in Petty Cash Vouchers which will then be posted into the Petty Cash Journal. Checks drawn on the Field Bank Account – A common method of paying expenses is by check drawn against your local field bank account. Checks drawn on the Home Office Bank Account – If payment in US dollars is required, a possible method of paying expenses is by a check drawn against the Home Office bank account. Such checks are assigned to the field if necessary. In using these checks, a field must comply with Home Office control procedures listed in the Internal Controls cash controls section of this manual Employee Expense Report – An employee expense report should be submitted whenever an employee is given a mission advance for business purposes or has spent personal funds for business needs. The employee expense report format should be standardized and easy to use. Vendor Receipts & Invoices – Vendor invoice or receipt Examples of Non-Cash Transaction Sources Notification of Expenses Paid by the Home Office – On a quarterly basis, the Home Office sends an e-mail notification of expenses charged to the field. These expenses must be account coded and posted into the field’s general ledger. The credit offset should be noted as income titled “Transfer from Grand Rapids / Burlington”. Miscellaneous Adjustments – This is the “catch all” for any other type of transaction that does not belong among the other source classifications. The most common type of Miscellaneous Adjustment is reclassifying miscoded expenses.
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