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When calculating a top-up amount for petty cash, do we also top-up the value of IOUs or not, since we are supposed to receive them in a short time anyway?
For example, my imprest amount is 100, I have expense vouchers of 50 and IOUs of 20, so do I top it up with 70 cash or 50 cash?It is safer to just top up with 50 cash to bring the cash balance up to 80.
The problem with topping up with 70 is that if the 20 in IOUs were paid back the next day, the cash might be 120 – more than needed. Also, if there are lots of IOUs the cash balance will be kept low which will encourage the person in charge to follow up for fast payment of the IOUs
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