How to Manage a Cash Float
- 1). Determine rules for the cash float. Decide what types of expenses the funds from the cash float will pay, the amount of money you want to maintain in the cash float, the time period during which you want to keep the cash float and how regularly you will replenish the funds in the cash float.
- 2). Appoint a custodian to take care of the day-to-day tasks related to the cash float. The custodian will determine whether to disburse the cash float money, according to the guidelines you set.
- 3). Store the cash float funds in a safe and secure place; for example, in a safe, a locked drawer or a metal box.
- 4). Announce the establishment of the cash float to anyone who might need to use the funds. If anybody wants to use the cash float money, he must get the approval of the custodian. When the level of funds falls below the level you specify, the custodian must approach the person in charge of finances in the company to replenish the account.
- 5). Instruct the custodian to keep records on any increases and decreases in the level of cash float funds. The personnel responsible for the company's finances and accounting may need the information.
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