Foreign Cash Management

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Foreign Cash Management

Cash Advances

 

Requesting a Cash Advance

ASU does not have a procurement card that can be used abroad. Furthermore, many countries still have cash-based economies. If you anticipate incurring project expenses in a foreign country, you may want to request a cash advance.

 

Types of Cash Advances

ASU has three types of cash advances, which can be used for the following purposes:

Expense Advances on Sponsored Projects

Travel Advance

Petty Cash

For approved project purposes when funds need to be readily available. This is the only acceptable type of advance for sponsored project and Investigator Incentive Award (IIA) accounts

For employees who expect to have reimbursable travel expenses that cannot be charged on an ASU travel card or a personal credit card

For low dollar (~$50-100), incidental expenses when another form of payment (procurement card, purchase order, check) is not appropriate or expedient

 

Managing a Cash Advance

Cash advances do not provide the same level of transparency as other payment methods. As a result, there is a bigger risk of fraud, waste, abuse, and audit findings. Responsible and ethical management of cash advances is crucial.

 

Receipts and Repayment

The first step in responsible and ethical management of cash advances is keeping receipts from your transactions. If you are in a remote location where you cannot obtain receipts, you may be permitted to keep a log that includes the date, approximate time, amount paid, item description, and a brief justification of the purchase. Without proper documentation, you may be required to repay the cash advance. You must also repay any unused funds.

 

Reconciliation Frequency

The second step in responsible and ethical management of cash advances is reconciling your receipts on a regular and timely basis as follows:

Expense Advances on Sponsored Projects

Travel Advance

Petty Cash

Each time an expense reimbursement is made or at least monthly

Within 30 calendar days of returning from a trip

Each time there is a disbursement or at least monthly

 

Traveling with Cash

In many countries, there are restrictions on how much cash you can enter and exit with. In Mexico, for example, the limit is U.S. $10,000 or equivalent. You can look up cash restrictions by country on the Department of State's Travel website. If you are carrying a large sum of cash into a country, look for declaration requirements as you go through customs. If you fail to declare, the cash may be detained or seized, and you may face criminal penalties.


Foreign Currency

 

Getting Foreign Currency

When exchanging money from one currency to another, your goal should be to get the best exchange rate and limit fees. Use OANDA to see current and historical exchange rates. Rates shown are interbank rates and are not what you will actually see commercially available. The closer you can get to these rates, the better deal you will get.

The best time and place to exchange money varies by your destination and travel plans. It is usually better to exchange money when you reach your destination. However, there are cases where you may want to purchase foreign currency from your bank in advance of travel. These include when the foreign currency is pegged to the U.S. currency, such as in Hong Kong, or when opportunities to exchange currency at your destination are limited. The best places to exchange currency at your destination are banks or bank ATMs. Kiosks in airports, train stations and other touristy areas generally have worse exchange rates and often have deceptive advertising.

 

Currency Fluctuations

If you are exchanging a large sum of money or making multiple exchanges, monitor the exchange rate so that you can take advantage of lower rates. The strength and stability of both currencies involved affect the exchange rate. Most of the time, currency fluctuations are relatively moderate, but a particular event or series of events can lead to more severe fluctuations. For example, the United Kingdom's vote to exit the European Union (Brexit) led to big drops in the British Pound. Monitor conditions and take them into consideration when deciding when to exchange money and how much money to exchange.


Foreign Banking

 

Using Credit Cards, Debit Cards and ATMs Overseas

There are a few simple steps you can take before travel to adequately prepare for foreign banking:

  • Alert your bank to your travel plans

  • Make sure your PIN has four digits only

  • Know your daily cash withdrawal limit

  • Find out if, and at what rate, your bank charges a foreign transaction fee

  • Understand your bank's network of ATMs

 

Opening Offshore Bank Accounts

ASU is prohibited by state statue from opening foreign bank accounts. If you believe you need a foreign bank account for your project, contact Global Operations. We can help you find an alternative solution.

 

Reporting Requirements

Any foreign bank account whose value exceeds $10,000 at any time during the calendar year must be reported to the IRS by April 15 of the following year via the Report of Foreign Bank and Financial Accounts (FBAR).