Difference between Imprest and Temporary Advance
The primary difference between an Imprest Account and a Temporary Advance lies in their purpose, duration, and management:
Imprest Account:
- Purpose: An Imprest Account is established to cover specific, recurring expenses of a relatively small and predictable nature, such as petty cash for office supplies or travel expenses.
- Duration: An Imprest Account is ongoing and maintained indefinitely, with funds replenished periodically to maintain a fixed balance.
- Management: An Imprest Account operates under a fixed balance system, where funds are replenished to a predetermined amount after they are disbursed. It follows a set of procedures and controls to ensure that funds are used for their intended purpose and that proper documentation is maintained for all transactions.
Temporary Advance:
- Purpose: A Temporary Advance is provided for a specific, one-time purpose or project, such as covering travel expenses for a business trip or funding a short-term project.
- Duration: A Temporary Advance is meant to be used for a short period and must be repaid within a specified timeframe, typically upon completion of the associated activity or project.
- Management: A Temporary Advance involves the provision of funds to an individual or department for a specific purpose, with clear guidelines on how the funds are to be used and when they must be repaid. It requires careful monitoring to ensure that funds are used appropriately and repaid in a timely manner.
In summary, while both an Imprest Account and a Temporary Advance involve the allocation of funds for specific purposes, the key differences lie in the ongoing nature of an Imprest Account for recurring expenses and the temporary, one-time nature of a Temporary Advance for specific projects or activities. Additionally, an Imprest Account follows a replenishment system to maintain a fixed balance, while a Temporary Advance involves the provision of funds that must be repaid within a specified timeframe.