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Methods of Payment and Imprest Advance Procedures

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Visit this webpage for information on "How to Pay for International Activities."  The Controller's Office has provided the options at MSU for methods of payment for Payroll, Purchasing, Services, and Travel, Direct Deposit for Employee Salaries and Expense Reimbursement, MSU Check and Non-U.S. Currency Draft, and Wire Transfers.


In general, an imprest account is a separate account used to pay out and replenish petty cash. All disbursements are documented with receipts and expenses are typically recognized when replenishments are made to the account. At MSU, imprest accounts are established for on-going research projects, generally conducted overseas through an in-country office. An imprest advance is provided by MSU to an individual, who typically sets up bank accounts for project use.

Imprest Advance Procedure

Imprest advances must be approved by the Chair or Dean, as well as Contract and Grant Administration, prior to the issuance of an imprest advance. CGA approval is provided on a case by case basis on restricted sponsored program (RC) accounts. The imprest advance request should be for a minimum of $20,000 and have a time span of at least four months. The due date of the advance reconciliation must be within 60 days after the project end date of RC account. In some circumstances, the reconciliation due date may be earlier.

It is common for the individual to set up at least three bank accounts: a US bank account into which the MSU checks will be deposited and two accounts in the country where business will be conducted (US currency and local currency). Funds are transferred from the US account to the non-US account by the advance holder as needed. All accounts should be set up in the name of the advance holder, not in MSU’s name, and be non-interest bearing.

Procedure for Requesting a New Imprest Advance

A request for a new Imprest Advance should be sent in writing to CGA at The request should include the following information:

  • Amount of the advance request
  • Justification for the amount being requested
  • Name of the individual responsible for the advance
  • Date that the imprest account will be due/fully reconciled
  • Business purpose for the advance
  • RC account(s) for which the imprest advance will be used
  • Chair or Dean approval

CGA may require additional information as necessary. If approved, CGA will forward the initial request and approvals to the Accounting Office at for processing.

Procedure for Modifying an Imprest Advance

In the event an imprest advance needs to be modified, the details of the requested changes should be sent to CGA at Typical imprest advance modifications include the addition or deletion of RC account numbers, extension of due date, and advance amount modification. If appropriate, CGA will forward the modification request to Accounting for processing after approval. If the individual responsible for the advance is changing, their advance needs to be closed, and a new imprest advance should be requested for the replacement individual.

Replenishing of an Imprest Advance

When the project is ongoing, receipts for allowable expenses are processed on a Disbursement Voucher (DV) using Payment Reason Code R – Replenish Open Ended Cash Advances and all expenses must use object code 6489, “Contractual Services.” The Accounting Office will set up a SP vendor to be used for the advance (format: Cash Advance – Custodian Name). This will generate a check back to the advance holder. The DV may also be completed to indicate to send a wire instead of a check.

Closing of an Imprest Advance

When the project has ended, receipts for allowable expenses are processed on a Distribution of Income and Expense (DI) document. The account number in the “From” section of the DI should be XZ052171, and the object code should be 6173, “Refunds.” The “To” section of the DI should contain the appropriate RC account(s) and use object code 6489, “Contractual Services,” to charge for the expenses incurred. The DI document reduces the outstanding amount of the advance per the receipts (the total of the DI must match the total of the receipts). Any portion of the cash advance not reconciled by receipts should be taken to the Cashier’s Office and deposited against the open advance. The advance number will be needed by the Cashier’s Office in order to properly credit the advance.

Tax/Reporting Requirements of an Imprest Advance

The IRS has reporting requirements for those that have signature authority on a non-US bank account. See PUBLICATION 4261. There are also reporting requirements for the university if a non-domestic bank account is opened to conduct university business. Please notify the Office of Financial Analysis and Reporting at 517-355-5029 or about any applicable non-US accounts.

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