At each enterprise, from time to time there is a need to issue cash to employees for various purposes, such as:
• advance on travel expenses;
• advance payment for administrative needs, purchase of inventory items, spare parts, for payment of postal and hospitality expenses, as well as all kinds of fees.
So, we will figure out who exactly has the right to receive funds for the report, what reasons are needed for this, how to properly draw up documents and accounting operations for issuing money, as well as correctly draw up an advance report on the costs incurred.
Accountable persons - who are they?
There are cases when an inexperienced or negligent accountant writes out a sum of money to the representatives of the supplier or customer and transfers it to 71 accounting accounts. Mostly, small enterprises sin this, believing that in this way they settled with the creditor or paid for the order. This is a gross violation of statutory legal acts.
Accountable persons are necessarily employees of the enterprise. In addition, the issuance of money for the report is preceded by the conclusion of an agreement on liability with the employee, which determines its measure and stipulates the rights and obligations of the parties.
As a rule, the circle of materially responsible and accountable persons is established by the head, issuing the corresponding order, updated annually. Accounting for accounting amounts reflects 71 accounts.
Travel expenses
Reporting sums of money for travel expenses are issued from the cash desk or transferred to the employee’s card on the basis of a written statement with the resolution of the head. Of course, in this case you do not need to conclude a liability agreement, because any employee of the company can go on a business trip, and the trip is based on a management order, and the account 71 reflects the operations.
Grounds for the payment of cash under the report
Such issuance is regulated by applicable law, and the basic rules for this operation are as follows:
• it is forbidden to draw up documents for payment of money under the report if the employee has not reported for the amounts received earlier;
• money is issued on an application endorsed by the head with a note on the amount and the period by which it is issued;
• a report on the expenses incurred is prepared and signed within 3 days after the end of the trip or the expiration of the time period set by the head.
Documenting
So, after the expenses are incurred, or upon arrival from a business trip, the employee must report within 3 days and submit to the accountant an advance report of the AO-1 form with attached documents proving the viability of the expenses.
In the expense report, the results are calculated and the result is displayed:
• there is no balance of money, since all funds have been used up;
• there is a remainder, since less was spent than planned;
• overexpenditure of issued funds, as they were spent in a larger volume.
The balance is returned to the cash desk of the company for FFP, and the amount of the overspending is issued to the hands of the FCO. All accounting operations for reporting amounts are reflected in 71 accounts.
In case of non-compliance with the rules established by law, the amount of accountable funds is withheld from the salary or is reflected as a shortage and subsequently recovered by court decision.
How does the account work?
The account in question summarizes information on settlements with employees on funds issued under the report. These amounts are included in the debit of account 71, corresponding to cash accounts, for example, 50 - “Cashier”. Documented amounts of expenses are debited from the credit of account 71 to the debit of expense accounts, for example 10 - “Materials”, etc.
Amounts not returned by employees are debited from the credit of account 71 to the debit of account 94 - “Shortcomings”. Subsequently, these amounts are debited from credit 94 to the debit of account 70. If deduction from wages is not possible for any reason, then account 73 is debited and the question arises of compensation for the damage caused to the enterprise.
It should be noted that analytical accounting is conducted separately for each employee with the obligatory display of monthly totals. Mechanized accounting using the "1C" program allows you to draw up the necessary document in the context of the issued or debited amounts, set the time range or set the list of accountable persons, all data are combined by account card 71. The accountant must report on each issued amount, having prepared an advance report in the allotted time . Analytics is combined into a journal order on account 71, which is compiled at the end of the reporting period.
Accounting accounts
Each expense report is worked out by the accountant with the posting of data to account 71. Postings reflecting operations to account for the reported amounts:
• Dt 71 - Kt 50 - an accountable amount has been issued from the cash register.
• Dt 71 - Kt 51 - the amount has been transferred from the current account to the employee’s card.
• Dt 41 - Kt 71 - purchase of goods from the accountable amount.
• D-10 - K-71 - the acquisition of materials.
• Dt 26 - Kt 71 - general business expenses were written off , for example, postal services were paid.
• Dt 20 - Kt 71 - travel expenses were written off.
• Dt 50 - Kt 71 - the balance of the reporting amount was paid by the employee to the cashier.
• Dt 70 - Kt 71 - the balance of the reporting amount is withheld from the employee’s salary.
• Dt 94 - Kt 71 - the employee did not report on the expenses incurred by the due date.
• Dt 73.2 - Kt 71 - retention of shortage from the employee.
• Dt 91.2 - Kt 71 - attributing the amount of the shortfall to other expenses, if recovery is not possible.
Features of account No. 71
The account is active-passive. Above, we examined the traditional accounting entries for account 71, when it acts as active, that is, it is debited when receiving money and credited when writing off expenses. As a passive account is used less often, but such cases do occur.
For example, there is no money at the cash desk of the company, but you need to go on a business trip, and the employee agrees to use personal finances on the condition that upon return the travel expenses will be paid. In this case, the wiring is D-t 20 - Kt 71.
In this case, expenses have arisen before payment, and the company is obligated to reimburse them. In this example 71, the account is passive.
If the company is a VAT payer
If the company is a VAT payer and accumulates the amount of tax paid for goods or services on account 19 - “VAT”, then when purchasing materials or paying for services from accountable amounts, it is necessary to reflect the VAT amount by posting Dt 19 - Kt 71 - to The amount of tax paid.
Ground for writing off costs
Accepting the expense report, the accountant checks the documents confirming the costs. These can be invoices, invoices and invoices when purchasing property, cash and trade receipts confirming payment of all kinds of services, i.e. primary documents, which are the fundamental basis for attributing costs to 71 accounts.
The main requirement for conducting a business transaction in the account is a written confirmation of the transaction. In other words, all expenses indicated in the expense report must be justified and confirmed by primary accounting documents, correctly executed, with the details, the necessary signatures, seals and stamps. Expenses not confirmed by documents or confirmed by underdeveloped securities cannot be accepted and reflected in accounting, and this is fraught with unpleasant consequences. An employee will pay such costs out of pocket.
Therefore, the accountable person should seriously approach the issue of preparing an expense report, in a timely manner, demand correctly completed documents for the expenses incurred.
Accountant Actions
The accountant accepting the expense report checks the arithmetic calculations, the availability and execution of supporting documents, in a special section makes notes on the reflection of expenses, reconciles 71 accounts, confirming posting with his painting. Then he writes out a cash or debit cash warrant for the amount of discrepancies between the issued and spent amounts, hands it to the cashier and closes the expense report.
What you need to remember when tax audits
The period for which funds are provided to the accountable for hujuda is not established by law. It can be determined by the head of the organization. However, this is not interpreted by law as the duty of the director. When setting the deadline, the employee must report on expenses within 3 days after its expiration. And if the deadline has not been set, then even for a long time without reporting on the reporting amount, it cannot be violated. Therefore, if such a period is not determined in the company, then the claims of the tax authorities regarding the long-term finding of the accountable amount in the hands will certainly be presented, although they cannot be considered justified.
Identifying such cases, the tax authorities qualify them as obtaining an interest-free loan, demanding to determine the amount of material benefit arising from the employee, include it in his income and withhold personal income tax.
This requirement of the tax authorities is illegal, since the concept of material benefit established by Art. 212 of the Tax Code does not include the situation described above. In accordance with the Tax Code, the material benefit is the income received:
• from savings on interest on the use of funds of credit organizations;
• from the acquisition of property or services under a civil law contract;
• from the acquisition of shares or other securities.
The arguments of the tax authorities in this case are unlawful, since loans to credit organizations are drawn up by the contract, and the issuance of the accountable amount is carried out upon application. But in the interests of company management - to properly draw up documents for the issuance of funds under the report in order to avoid claims of inspection bodies.