P&C Accounting Manual > Procedures and Processes >

Investments

Excess P&C funds that are not required in the immediate future can be invested in any bank or approved financial institution. See Establishing a bank account.

You can put surplus cash only in investments such as term deposits, passbook accounts and the like.

Any deposit in an investment fund should be authorised by a meeting of the P&C. Before making a recommendation to a meeting, the treasurer should compare interest rates offered by the approved financial institutions.

The signatories for the investment account should be the same as for the main P&C cheque account.

Withdrawals from investment accounts should be immediately deposited back into the main P&C cheque account. Withdrawals must also be authorised by a P&C meeting.

Recording investments

Entering investments

Draw up a voucher for the investment.
Write a cheque payable to the financial institution with which the investment is to be made.
Add an investment column to the payments page of the cashbook.
Record the amount in the investment column and in the payment column of the cashbook.
Set up an investment register and record the details of each investment as given in the sample register page.

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Withdrawing investments

Check the terms of the investment before seeking P&C approval for the withdrawal.

Advise the financial institution that all or part of the investment is to be withdrawn. Add an investment column to the receipts page of the cashbook.
Record the amount withdrawn in this investment column and in the banked column of the cashbook.

Enter the withdrawal in the investment register as shown in the sample register page.

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Investment interest

Interest will be received in one of three ways.

Direct credit to the cheque account

This is the recommended method. When the bank statement arrives showing the interest, treat the interest the same as if it had been received by cheque. The entry in the cashbook should refer to the bank statement. Do not make any entries in the investment register.

Cheque

The bank may issue you a cheque for the amount of interest. Deposit this cheque as soon as possible into the cheque account. Make an entry for the amount in the interest or general column and banked column of the receipts page of the cashbook. Do not make any entries in the investment register.

Direct credit to the investment account

This method is not recommended. Direct credit involves difficult accounting entries.

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