Negative cash balance
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
04 March 2013
Hello Sir,
I m newly joined in a company, while viewing the accounts of the company it has a negative cash balance, pls explain me wat should i do, how is the procedure i should work on.
I m newly joined in a company, while viewing the accounts of the company it has a negative cash balance, pls explain me wat should i do, how is the procedure i should work on.
05 March 2013
First verify the vouchers and confirm is any cash receipts doesn't entered or is any excess payments entered. In one word verify as the view is any cash transactions not entered or entered wrongly as well as any other transaction wrongly recognaised as cash transaction or any understated cash receipts you shall be check all the transactions which are effecting cash is properly accounted.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
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Querist : Anonymous
Querist :
Anonymous
(Querist)
06 March 2013
i have a dought in the emplyoees who are working there, and most of the accounts r not proper, so in this case how should i proceed, can u tell the detailed procedure about how cash related thing should be maintain in small company, i mean the procedure of making cash voucher who should verify etc
apart from this should i have a look on cash register which they r maintaining.
and thks for ur reply
apart from this should i have a look on cash register which they r maintaining.
and thks for ur reply
06 March 2013
Each and every transaction must be go through vouchers and based on such vouchers we are entering the transactions into accounts and prepares verious ledgers. So our basis to prepare accounts is vouchers after preparing the accounts in a sequance of method specified we knows the balances of verious accounts including cash balance. Any account may be fall to negative balance in our books" BUT CASH BALANCE NEVER BECAME NEGATIVE AT ANY TIME" because with out cash in hand we can't make any payment by way of cash even though cash is zero with us but we required to pay cash then we should borrow the cash first and then we make payment i.e should be cash shall be in hand otherwise should be received from others before making payment i.e cash balance never be negative if we noticed cash balance negative at any time i.e if we forget to enter any receipt of cash in the books or wrongly entered any excess payment or any payments which are not related to cash wrongly entered as cash transaction so first we have to check that accept by verifying all cash vouchers with the basis of cash book or register.
The above is small brief explanation the logic behained why cash balance shall not become negative.
So now lets we come to your case. You saying their are no proper accounts and you have a doubt regarding the employees. And you are the new to the company. So my suggestion is as follows:
1) First inform to the Management regarding negative cash balance with notice of highest negative cash balance and period of negative cash balances.
2) verify the cash book with the available date i.e with the available vouchers with the help of that vouchers if you found the mistake and adjusted it and then cash comes to positive balance then fine but notice to management regarding such mistakes.
3) Verify the bank account copy with the cash book is all cash withdrawns from the bank entered in the books as well as verify is any bank payments entered as cash payments etc....
4) After doing of above steps and adjustments where ever required still have negative cash balance then notice the transaction which becomes negative cash balance and all the details regarding such transaction like whom the payment made for which purpose the payment made etc... and make an enquiry is such expense actually incurred or not and also make an enquiry is any receipts forget to enter into the books etc....
5) Then notice this i.e pointed out above point no 4 to the management and make a complaint to the management regarding the employees on whom you have doubt and you feeling committed for fraud etc... and insist such employees to repay such payment which is they received earlier etc...
Note: First go through the transactions assuming is any mistakes in the accounting and is any receipts forget to accounting for this purpose first you ask the management with noticing negative cash balance ask is any receipts is there which are not entered in books as well as confirm is any without payments passed through accounts shall we remove this as well as verify is all the cash withdrawn from the bank entered into the cash book(I.e Make BRS).
For this purpose you make take your any friend help who is senior and have knowledge for this because of with out knowing the facts and accounts any future suggestions and explanations may not possible.
The main concept is cash balance never negative if it is negative is shall be confirm is any receipts not entered or is any payments excess entered i.e actually not incurred but by-mistake entered in the books like that view we have to solve that then also we not find then we have to go for other aspects and views.
For any doubts during your proses i welcome you to write your query.
All the Best.
OM SAI SRI SAI JAI JAI SAI
The above is small brief explanation the logic behained why cash balance shall not become negative.
So now lets we come to your case. You saying their are no proper accounts and you have a doubt regarding the employees. And you are the new to the company. So my suggestion is as follows:
1) First inform to the Management regarding negative cash balance with notice of highest negative cash balance and period of negative cash balances.
2) verify the cash book with the available date i.e with the available vouchers with the help of that vouchers if you found the mistake and adjusted it and then cash comes to positive balance then fine but notice to management regarding such mistakes.
3) Verify the bank account copy with the cash book is all cash withdrawns from the bank entered in the books as well as verify is any bank payments entered as cash payments etc....
4) After doing of above steps and adjustments where ever required still have negative cash balance then notice the transaction which becomes negative cash balance and all the details regarding such transaction like whom the payment made for which purpose the payment made etc... and make an enquiry is such expense actually incurred or not and also make an enquiry is any receipts forget to enter into the books etc....
5) Then notice this i.e pointed out above point no 4 to the management and make a complaint to the management regarding the employees on whom you have doubt and you feeling committed for fraud etc... and insist such employees to repay such payment which is they received earlier etc...
Note: First go through the transactions assuming is any mistakes in the accounting and is any receipts forget to accounting for this purpose first you ask the management with noticing negative cash balance ask is any receipts is there which are not entered in books as well as confirm is any without payments passed through accounts shall we remove this as well as verify is all the cash withdrawn from the bank entered into the cash book(I.e Make BRS).
For this purpose you make take your any friend help who is senior and have knowledge for this because of with out knowing the facts and accounts any future suggestions and explanations may not possible.
The main concept is cash balance never negative if it is negative is shall be confirm is any receipts not entered or is any payments excess entered i.e actually not incurred but by-mistake entered in the books like that view we have to solve that then also we not find then we have to go for other aspects and views.
For any doubts during your proses i welcome you to write your query.
All the Best.
OM SAI SRI SAI JAI JAI SAI
Querist : Anonymous
Querist :
Anonymous
(Querist)
06 March 2013
Such a good reply.Thk u So much sir, i will work on this. If there is any problem i'll let u know.
07 March 2013
Okay always welcomes you for clarification of your doubts and suggestions.
OM SAI SRI SAI JAI JAI SAI
OM SAI SRI SAI JAI JAI SAI
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