IBC Handbook - Accounting and Finance

I. Accounting and Cash Management in IBC

In creating job roles for your project, you should include the positions of treasurer and controller. You may also include other positions with accounting responsibilities. The treasurer has responsibility for receiving and dispensing funds. While the controller would be charged with the responsibility of insuring that:

 

• The entity complies with all financial policies and procedures of the University

• That proper reporting of financial activities is made for the program

• That internal controls are adequate and that controls are being followed

Financial activities including accounting and cashiering activities must be coordinated with financial services/accounting personnel. Students assigned to the financial/accounting functions will interact with the BYU-I financial/accounting office to ensure that BYU-I policies and procedures and proper financial controls are in place and being followed.(IBC Deposit Forms )

 

Relationships between the IBC programs and any financial institution must be coordinated with financial services, including opening of bank accounts or credit card operations (merchant service accounts).

 

A. Cash Management

1. The Vice-President of Finance must work with IBC Finance instructor and the BYU-I Financial Services Department to access funding & set up an accounting system.
2. The treasurer can maintain a petty cash account with no more than fifty dollars at any one time.
3. All petty cash disbursements must be accompanied with a petty cash voucher and a copy of the receipt for the items being reimbursed. All petty cash vouchers should be sequentially numbered, like a checking account.
4. The relevant department head (e.g. marketing) must approve all expenditures prior to submission for payment. Expenditures under thirty dollars may be disbursed from petty cash. All others must be paid by check. All expenditures must be accompanied by an explanation of the items purchased, price, purchaser's signature, and date purchased on a 3x5 index card, to be retained by the controller.

B. Purchasing Policy

If an item is to be purchased, the purchaser must complete a purchase order (PO) on a 3X5 index card showing the name of the purchaser, the items to be purchased, price, and the vendor. The department head must sign this card (e.g. operations) and submit the card to the treasurer before a purchase can be made. Vendors should contact the treasurer for payment of an open PO. No payment for goods may be made before the goods are received.

 

C. Reimbursement of Expenses

All group members are eligible for reimbursement of out of pocket expenses. These expenditures must be for business purposes and should follow all the disbursement rules above. Receipts are necessary, and all members are reminded of the honor code you signed to follow while attending BYU-Idaho.

 

D. Accounting

The controller is responsible for accounting for all expenditures and receipts and to produce an accurate set of final financial statements indicating the financial health of the enterprise. As such, all disbursements issued by the treasurer must be sent to the controller for recording. All cash receipts will be logged by the controller prior to being sent to the treasurer for deposit.

 

The controller will maintain a set of financial statements similar in format to those learned in Accounting 201. The controller will maintain all records with all the necessary safeguards assured (i.e. back-up files maintained), and a complete set of financial reports current up to the end of the previous week. The accounting consultant available to your group may address any open accounting issues.

 

It is expected that the treasurer and controller will issue a more complete set of accounting and cash management procedures. These should be submitted to one of the course professors before implementation.

 

E. Sales Tax

Applicable sales tax laws do apply to your project. You may be required to collect sales tax, depending on the type of business you establish. Information on sales tax rules is available from your instructors.

 

F. Auditing

Each field project will be audited to ensure compliance with the policies above.

 

G. Required Appropriations

5% of all revenue must be set aside as a type of appropriation to help increase the probability of the initial loan being repaid.

H. Internal Controls over Cash Receipts

The controller must establish a sufficient system of internal controls over cash receipts. A cash register, cash box, or a numbered receipt system should be used to ensure all cash receipts are handled and accounted for correctly. Along with this cash receipt system, and internal control should be established over inventory, if applicable.

 

II. Financial Statements

There are four interrelated reports that are to be presented each Monday to the IBC Finance instructor during the semester. Three of them are for keeping track of cash (cash disbursements, petty cash disbursements, and cash receipts) and one is an income statement.

 

The BYU-Idaho Accounting System will produce a monthly income statement and general ledger which will summarize all revenues & expenses deposited or charged to the internal accounts of your company. Controllers must reconcile two weekly statements with this monthly