Suspense Payments Using Memorandum Voucher in TallyPrime: 7 Easy Steps

This method in TallyPrime streamlines recording a petty cash advance for office supplies with unknown details initially.

It utilizes a single memorandum voucher that’s later converted into a payment voucher when the actual expenditure details become available.

Here’s a breakdown of the process with an example:

1. Scenario:

A company provides a ₹1,000 cash advance to an employee for office supplies. The exact nature and cost of the supplies are unknown at the time of advance.

2. Create a Memorandum Voucher:

• Go to “Vouchers” (usually by pressing Alt+F12).
• Select “Other Vouchers” (F10) and choose “Memorandum” (if the option is enabled). Alternatively, you can press Alt+G (Go To), type “Memorandum Register,” and press Enter.
• Enter the voucher details:
  • Date: The date of the cash advance.
  • Particulars: Describe the purpose (e.g., “Petty Cash Advance for Office Supplies – Details to Follow”).
  • Debit: Select the expense account for office supplies (e.g., Office Supplies Expense A/c). This account will temporarily hold the advance amount.
  • Credit: Select the Cash Account from which the advance is given (e.g., Petty Cash A/c).
  • Narration (Optional): Add any additional information if needed (e.g., “Cash advanced to [Employee Name]”).
• Save the voucher.

3. Example Voucher:

4. Convert Memorandum Voucher to Payment Voucher (When Details Are Known):

* Once the employee submits receipts for the purchased supplies, let's say:
    * ₹500 for Staplers
    * ₹300 for Printer Ink Cartridges
    * ₹200 unspent cash returned
* Access the original memorandum voucher you created earlier. TallyPrime allows you to convert memo vouchers into other voucher types like payment vouchers.

5. Converting the Voucher:

1. Locate the memorandum voucher you created for the petty cash advance.
2. In most TallyPrime versions, you can right-click on the voucher and select “Alter” or find an option to edit the voucher.
3. Edit the voucher details:
   • Debit Side: Update the debit side to reflect the specific office supplies expense accounts based on the receipts. In this example:
     • Change the existing debit entry (Office Supplies Expense A/c for ₹1,000) to:
       • Staplers Expense A/c (debit) ₹500
       • Printing Ink Cartridges Expense A/c (debit) ₹300
   • Credit Side: Maintain the credit side with the Petty Cash Account (e.g., Petty Cash A/c) for ₹1,000 (unchanged).
   • Particulars: Modify the particulars to reference the initial advance and list purchased items with amounts. For example: “Converted from Petty Cash Advance Voucher dated 2024-04-17. Details: Staplers (₹500), Printing Ink Cartridges (₹300), Cash Returned (₹200)”.
4. Save the voucher. This essentially converts the memorandum voucher into a payment voucher, reflecting the actual expenditure details.

Note: The specific steps for converting a memorandum voucher to a payment voucher might vary slightly depending on your TallyPrime version. Consult your software’s documentation for detailed instructions.

6. Benefits of this method

1. Simpler and Faster:

Requires fewer voucher entries compared to other methods.

2. Suitable for Streamlined Recording:

Ideal when details are expected soon after the advance, reducing the need for multiple vouchers.

3. Clear Audit Trail:

The converted payment voucher maintains a link to the original memorandum voucher for traceability.

7. Important Considerations:

1. Maintain Clear Descriptions:

Ensure proper descriptions in both the memorandum voucher and converted payment voucher for better record-keeping.

2. Double-Entry Mode Recommended:

While TallyPrime allows single-entry mode, using double-entry mode for financial transactions is generally recommended for a complete and balanced record in your general ledger.

By effectively utilizing this method in TallyPrime, you can efficiently manage petty cash advances for office supplies with unknown details initially, ensuring accurate and organized accounting records.