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
- Staff car accidental repair.. spare parts
- Office washroom taps repairs ( plumber )
- Garden maintenance
- Carpenter repair
- Building repair – civil – Bricks, stone dust etc
- Building whitewash. / paint
- 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
- All production C class items
- All electrical repair
- All machine repair
- If material + can be standardised
- Tube light
- LED lights
- Machine oils
- QC lab items
- Kitchen regular items
- Full year long term contract, organised super market. Dept store… with proper PO, proper credit terms, free office delivery, weekly or monthly schedule
- So benefit
- Proper Po, Proper all things like a normal raw material
- Proper po vs actual MRR
- Price control
- Consumption control
====
Materiality for bill :
-
- Above Rs 5000, bill is highly recommended
- 1000 to 5000 ok
- 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
So, this was the academic discussion and suggested SOP’s for a Small / Medium Pvt Ltd company, especially in the home grown MSME sector.