WHAT SHOULD ACCOUNTANTS DO WHEN THE CASH FUND IS TOO MUCH?

A cash fund that is negative or has too much excess is both unreasonable and valid and is a headache for many step-siblings. Why did the company borrow money from the bank and have billions of dong in excess on its books? What is the reason here? How will accounting handle it? Let's find the answer through the article below!

1. Why does virtual cash exist on accounting books?

Often, companies using two bookkeeping systems will often encounter a situation where the actual cash fund and the cash fund on the books have large differences.
* The main reason is due to:
– Internal expenses do not have invoices or documents are invalid, so the accountant ignores them and does not include them in the tax book system. This leads to the fact that there is an expense, but the tax books do not show this expense.
– Enterprises have not contributed enough capital, but accountants still make virtual capital contribution entries.
- The business has paid the customer's debt, but the under-accounting is still hanging on the debt account (usually the reason is that the two parties did not make a debt reconciliation record).
– Enterprises pay salaries to employees but do not account for the reason because they do not include all actual personnel in the financial book system but only track internally (usually because the unit does not want to pay insurance for workers should do it this way).
Most of the time, the main reason is that businesses sell invoices to balance the business's input and output (these are virtual revenues -> virtual cash fund).

2. How to handle virtual cash balances in businesses

To balance and reduce excess cash in the cash fund, accounting needs to:
– Increase salary costs by increasing employee income, however, you need to pay attention to this method so that you do not have to pay personal income tax and social insurance.
+ Income = Insured salary + non-insurable allowances (lunch allowance, housing allowance, child care allowance, gasoline, phone money + other supports and allowances) (Pursuant to Circular 59/2015/TT-BLDTBXH, in 2016 it was Circular 26/2016/TT-BLDTBXH).
+ Increase the cost of holiday bonuses and bonuses based on labor productivity.
+ Accompanying documents: Labor contract, time sheet, salary payment sheet with full signature, salary and bonus regulations, collective labor agreement (if any).
+For holiday and New Year bonus payments... there should be salary and bonus regulations and a list of employees receiving bonuses. All must be signed by the employee.
– Costume allowance for employees: in-kind expenses are completely exempted, maximum cash expenses: 5,000,000 VND/year/person.
– For invoices under 20 million, limit payment via bank and pay in cash.
– Expenses without invoices or invalid invoices and documents are still accounted for normally, but when determining income for corporate income tax purposes, deduct those expenses. And on the declaration form tax settlement Corporate income includes these amounts in target B4.
– Review debts owed to suppliers. Suppliers who have paid in cash but have not yet made payment vouchers should proceed with making payment vouchers.
– For output invoices under 20 million, customers who have paid in cash can temporarily vote for collection and be considered debt-buying customers.
– Can make advance payments to suppliers
– Reduce the company's charter capital, but this method is not very preferred. (But in case the charter capital is too large compared to the actual spending needs of the enterprise, the accountant can propose a plan to reduce the charter capital for the enterprise. Note: procedures for reducing the charter capital are done at the Department of planning and investment in the province/city and when reducing charter capital changes the license tax rate, the accountant needs to make a license tax declaration and submit it before December 31 of the year of change so that the following year the license tax can be paid at the same rate. new)
– Make work advances for employees.
– How much capital is contributed and accounted for does not make an accounting entry for virtual capital.
– Lending to individuals, however if the company is borrowing from a bank, this method should not be used. No business borrows from a bank but lets other individuals borrow.
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