Want to be systematic ? Want to reduce Wastages ? Want to prevent Leakages ?

Want to do Preventive Action plan

How to Account for Petty Expenses in the Company Pantry Washroom Repairs

[Academic discussion only]

These are the Steps recommended for

Method 1 : / Part 1 : Very small purchases, with following trigger points

Category 1

No minimum stock required,

infact no stock to be kept. either fully consumed, or purchased only exact qty, or left over is disposed off, like paint for your office /factory . The balance wet paint is discarded . Stock kept might be nil usually.

No Rate history required

No accountability required

Example

1. Staff car accidental repair.. spare parts
2. Office washroom taps repairs ( plumber )
3. Garden maintenance
4. Carpenter repair
5. Building repair – civil – Bricks, stone dust etc
6. Building whitewash. / paint
7. Office snacks, samosa, sweets, perishable ( Note Kitchen and pantry items = regular is excluded,.. it should be controlled if desired )

Ideal solution is

If expense is made before the rate is finalised

And po is only a formality

Then the solution is

Get proper invoice, if available ,if possible

Pass the accounts voucher in books via a special route. “ 5A”

Do TDS, as per rules =OK

Take ITC of GST as per rules, if available. = OK

No PR required = ok

No PR Approval required = ok

No PO required = ok

No PO Approval required = ok

No Gate Entry

No MRR required = Ok

No QC required= OK

Put all the items , even if 100 items in that invoice.. into single HS code,

Since not material for the company as a whole

TDS will be automatic, in Finsys based on the TDS section/Rate to the vendor master

Category 2 items

Here the trigger points are

Stock required = yes

Rate history required = yes

Consumption Accountability required

But they are not the production items

Example

1. All production C class items
2. All electrical repair
3. All machine repair
4. If material + can be standardised
   1. Tube light
   2. LED lights
   3. Machine oils
   4. QC lab items
   5. Kitchen regular items

5. Full year long term contract, organised super market. Dept store… with proper PO, proper credit terms, free office delivery, weekly or monthly schedule
6. So benefit
   1. Proper Po, Proper all things like a normal raw material
   2. Proper po vs actual MRR
   3. Price control
   4. Consumption control

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Materiality for bill :

1. 1. Above Rs 5000, bill is highly recommended
   2. 1000 to 5000 ok
   3. Below 1000 = you decide, ideally required, but can allow in case it is practically not possible. Even a paper slip can be approved by the sanctioning authority if situation so demands example autorickshaw charge of Rs 200, or Metro coupon of Rs 24, or a Water bottle of Rs 20, or a Tea of Rs 10

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So, this was the academic discussion and suggested SOP’s for a Small / Medium Pvt Ltd company, especially in the home grown MSME sector.

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