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5 Myths about Advance Requisition Form in NGO

Advance Requisition Form is one of the important document which is very useful for Internal Control System. However there are many misunderstanding prevailing. Let us today, discuss five main myths regarding Advance Requisition Form in NGO.

Myths about Advance Requisition Form

 

1. Advance Requisition Form has to be prepared on Monthly

Generally, Advance Requisition form is to prepared on monthly basis. However it is not standard rule. NGO having more turnover can prepare it on fortnightly basis. Sometime, amount involved in project expenditure are not higher or geographical location of Field office is far from head office, even quarterly Advance Requisition From can be prepared.

2. Only Filed Staff has to prepare Advance Requisition Form

Anyone who is entitled to receive advance, has to prepare Advance Requisition Form in the NGO. Generally, in NGO, somehow, Management personnel receive advance money for project expenses or administrative expenses, are not preparing Advance Requisition Form. For Good Internal Control System,  even trustee or management is require to ask for advance only through Advance Requisition Form

3. It must be Accurate

Advance Requisition Form is kind of estimation of expenditure for next month. It may not be accurate. However care should be taken that figures of expenditure are purely on the basis of approved budget of projects and near to accurate.

4. Important only for giving Advance

Not at all, it is very good document for internal control system, one can check the track records of expenditures. Even comparison can be easily done for what advances ask and how it is used. So that there are many importance of one document, if prepare and analyze properly.

5. There is fixed format of Advance Requisition Form

Every NGO has to prepare format according to their requirements. Here you can find specimen copy of Advance Requisition Form. You can add or delete some of the information as per your requirements.

ARF

Summary

Once it is a part of the procedure of the NGO internal control system, it gives more transparency and efficiency in Financial and Management Control System

Hope this will help you in your NGO, if you have any question, you can ask here or chat with us. Also your comments are welcome on the above subjects.

Advance Requisition Form and its Importance in NGO

What is Advance Requisition Form?

In NGO world, most of expenditures are generally spent by field workers to complete projects of NGO. And thus Project Advance is playing major role in accounting of NGO. This is the area where it needed more Internal Control and Check. One of the handy tool is Advance Requisition Form. It tells Accountant or Finance person that how much advance require for project expenses and other overheads in next month.

What items to be included in Advance Requisition Form?

As such no thumb rule on standard format of Advance Requisition Form, however following information must be there in good Advance Requisition Form.

  • Heading : Advance Requisition Form for ___________ month
  • Name :  Field Staff / Project Officer
  • Location : Field Office Name
  • Particulars (Showing Project Activities and overheads)
  • Amount (If advance required for both FC and Non-FC project, it should mention separately)
  • Accountant’s Remarks and Signature
  • Approves Remarks and Signature
  • Summary of Advance Account (Showing Last Month Balance + Current Month Advance – Current Month Expenditure = Closing Balance)

Standard Format of Advance Requisition Form

Download from here standard Format of Advance Requisition Form. This is a specimen copy, you can customized according to your organization’s need and internal control system.

ARF

Importance of Advance Requisition Form

  • Get clear cut idea how much fund needs for next month.
  • For which activities funds are needed?
  • To compare last month expenses to last month advance requisition.
  • Cumulative Advance Balance can easily trace out.
  • It is wonderful tool of Control Mechanism
  • It is very useful document for monthly program planning
  • For Accountant, Advance Requisition Form helps for Fund Management Planning

Summary

One of the general myths regarding Advance Requisition Form is that Management personnel, heading any project, need not require to prepare it. Irrespective of size of NGO, this is one of the best instrument to establish and maintain Internal Control System.

Hope this will help you in your NGO, if you have any question,  you can ask here or chat with us. Also your comments are welcome on the above subjects.