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2 HASKINS & SELLS January Cash Disbursements by Branches BY C. R. OLIN, JR. (Supervising Accountant, Cincinnati Office) ALARGE manufacturing company, through its thirty sales branches, efficiently makes and adequately controls annual cash disbursements of about five million dollars. It is done out of a fund of $15,000.00. Less than two years ago its branches numbered only twelve; its annual disbursements through these branches aggregated but one million dollars or less; and the fund amounted to $30,000.00 or more—indicating that the present volume of business under the old methods would have required a fund of at least $150,000.00. The present plan affords a number of features which are interesting and desirable both to public accountants and to any institutions whose business transactions and form of organization require that disbursements be made by employes located in widespread and distant points. One of the more important is the absolute control and check by the home office. This is of particular interest at present in view of the unusual attention which is being given to the cash situation by accountants and executives. The plan can be better appreciated by having in mind the methods it has superseded. These old methods, in this case, were very similar to those which have been and are being widely used by others. A comparison of the old and the new will make obvious many of the advantages gained and it is to be hoped that it will suggest beneficial adoption, either in part or as a whole, of the new plan by others. The outline of the old methods is brief and confined to the essentials. Formerly each branch was supplied with an imprest fund. These funds varied from $100.00 to $5,000.00, depending upon the size and location of the branch. The amount was expected to be sufficient to cover their requirements for a reasonable length of time. Actual practice showed that seasonal requirements necessitated temporary increases in these funds. It was, of course, intended that such temporary increases would be returned when the emergency passed. However, they more often became permanent ones or were retained by the branch for a period considerably longer than necessary. It is a human trait, it seems, to like to control more money than actual needs dictate. Naturally such excess funds were unprofitably idle. At most branches a large part of the imprest fund was carried as cash in hand. Purchases and expenses of varied size and character were paid for out of it both in cash and by check. Supporting vouchers of various sorts were taken. These were sent in to the home office for reimbursement when the fund became diminished. Geographical distance from the home office necessitated larger balances at the more remote branches to care for their needs while the reimbursement checks were in transit. Audit and control of the branch funds were more or less ineffective. When bank accounts were maintained for part of the funds these accounts could, of course, be checked and audited with some degree of satisfaction and safety. But when all of the fund was in hand, or when part was in hand and part on deposit, it can be seen readily that proper control and simultaneous audit (with other funds of the company) were not only difficult but perhaps expensive, especially if made by the company's own traveling auditors. The new plan has all the advantages of the old and few, if any, of the disadvantages. Some of the requirements of the
Object Description
Title |
Cash disbursements by branches |
Author |
Olin, Charles Ralph |
Subject |
Cash flow -- Accounting |
Citation |
Haskins & Sells Bulletin, Vol. 11, no. 01 (1928 January), p. 2-5 |
Date-Issued | 1928 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 11-p2 |