Table of Contents

CASH POLICY: SAMPLE 1...................................................................................................................................... 3

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 CASH POLICY: SAMPLE 1

Prepared By:

Approved By:

Revision Date:

Effective Date:

The following sample outlines a set of policies and procedures for the use of cash and cash equivalents that
preserves principal, meets liquidity needs, and delivers a suitable return related to these policies and market
conditions.

PURPOSE

The purpose is to establish uniform policies for cash and cash equivalents for Company X that preserves
principal, meets liquidity needs, and delivers a suitable return related to these policies and market conditions.

SCOPE

For financial reporting purposes, cash includes currency on hand, checks and demand deposits with banks or
other financial institutions, as well as deposits in transit.

DEFINITIONS

CASH EQUIVALENTS
Short-term, highly liquid investments that are:
• Readily convertible to known amounts of cash
• Have original maturities of three months or less
• Near their maturity that they present an insignificant risk of changes in value because of changes in interest
rates

PROCEDURES

CASH HANDLING RESPONSIBILITIES

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• Deposit cash receipts to the bank intact on a daily basis.
• Record all cash receipts to the appropriate subledger and general ledger on the date of receipt.
• Clear unapplied cash (applied to a specific AR account and customer) daily by each plant. Each plant
controller should sign off on the previous day’s cash clearing report in a timely manner. See accounts
receivable for further explanation.
• Limit payments to checks rather than actual currency.

All sites are required to complete the bank account opening form whenever new bank or other related investment
accounts are needed. This form achieves the following:
• Highlights the accounts currently open
• Determines why the new account(s) are needed
• Provides an estimated cost in opening needed accounts

Additionally, the bank account documentation from the bank must also be presented to Corporate Treasury for
their review to ensure it complies with the company’s credit facility and other loan documents.

Bank accounts can only be opened by officers of Company X (as authorized by the board of directors). Signature
cards must be updated at least annually or as indicated by a change of events (termination or addition of signer).

Company X should also use lockbox processing upon receipt of cash or cash equivalents (checks, etc.). A third
party will process these deposits and issue a daily report to Company X for input.

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 CASH POLICY: SAMPLE 2

Prepared By:

Approved By:

Revision Date:

Effective Date:

The following sample outlines a set of policies and procedures for the cash function.

PURPOSE

The purpose is to provide a standardized means of managing and accounting for Company X’s cash funds.

SCOPE

The intended use of this policy is for offices and subsidiaries of Company X.

POLICY

CASH RECEIPTS
Refer to the accounts receivable policy.

CASH DISBURSEMENTS
Refer to the accounts payable policy for further details on cash disbursements issued through checks or
electronic payments.

Requests for electronic transfer disbursements must be documented and properly approved before they can be
initiated in the system and submitted for processing. The chief financial officer, the corporate controller or the
corporate accounting manager must approve requests for transfers less than $X. Requests for transfers equal to
or greater than $X require special bank processing since a system limitation will prevent Company X from
processing such large transfers. Once the transfer receives the proper approval, the chief financial officer, the
corporate controller, the corporate accounting manager, the sales and use tax accounting clerk, or the corporate
accountant must initiate it. Note: The individual initiating the electronic wire transfer in the system is prohibited
from approving the same electronic wire transfer request.

CASH RECONCILIATION
Incoming and outgoing cash should be reconciled daily.
• Each morning, the corporate accountant is responsible for entering the daily cash reconciliation information
from the bank report into an Excel spreadsheet and distributing it to executive management for review.
• The corporate controller is responsible for analyzing Company X’s cash position daily and distributing the
analysis to the chief executive officer, chief financial officer, chief restructuring officer, executive vice president
of sales and the corporate controller for review.

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• The corporate accountant is responsible for identifying all outstanding checks at each month-end.
• Company X subsidiaries are responsible for submitting a weekly cash flow analysis to the corporate controller.
Additionally, these subsidiaries are responsible for submitting a cash reconciliation to corporate accounting at
the end of each month in their financial reporting package.

PETTY CASH
Petty cash funds allow cash to be made available to departments and activities to facilitate cash payment for
minor expenses while maintaining proper control. Individual offices will maintain petty cash funds. Funds will be
set up in the amount of $X for authorized out-of-pocket expenses and minor business expenses. Permits and fees
less than $X and miscellaneous office expenses less than $X (e.g., postage stamps) can be paid through petty
cash.

Reimbursements cannot be made for vendor invoices, employee advances, employee expenses, casual labor,
computer equipment, fixed assets, office supplies, personal items, memberships, subscriptions, dues, furniture or
equipment, payments for personal services, travel advances, or to prepay guaranteed return postage. They also
cannot be used to cash as personal checks or loans.

Office supply orders should be placed through corporate weekly. Corporate accounts payable is responsible for
placing all office supply orders through Company X’s national account at Supplier Y. Office supplies should arrive
at the offices within two business days.

For reimbursement, receipts and proper documentation, including the petty cash reimbursement form, should be
coded and sent to corporate accounts payable on the third workday of each month. A corporate accounting clerk
will review all petty cash expenses for reasonableness. Offices with petty cash bank accounts are responsible for
submitting monthly bank statements to corporate. Offices should enter petty cash into the accounts payable log.
The invoice date should be the month-end date, the invoice number should be month/year “petty cash,” and the
invoice amount should be the total expenses out of the office checking account or petty cash box for the month.

Copies of checks issued, when applicable, and original receipts for each item must be attached to the petty cash
reimbursement form submitted monthly to Corporate. Any items on the summary that do not have appropriate
documentation will be credited off the reimbursement and not replenished to the petty cash accounts. Items
automatically deducted from checking accounts, such as monthly maintenance fees for checking accounts, should
be noted on the petty cash reimbursement form. If items in the petty cash account should be charged to a job,
indicate the job number and related charge code in the account number space on the reimbursement form.
Offices will not be reimbursed for purchases that are not permitted through petty cash as outlined above.

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