QuickBooks: Assisting petty cash accounting procedures
When companies need to make small payments for purchases such as milk, stamps, lunches, it’s often not appropriate or practical to pay via cheque or credit card. Petty cash accounting receives its name because it deals with “petite” amounts of money. This form of accounting is a procedure that allows a business to make and track their small purchases. Even though the payments are small, it’s important to record your petty cash procedures to know where all of your business’s funds are going.
There are various ways to manage your business’s petty cash fund effectively. An easy-to-use method is to use QuickBooks petty cash accounting software. We offer premium petty cash accounting and general accounting software packages catering for a wide variety of small to medium-size businesses. Our packages comprise a combination of accounting software programs beneficial for managing your books.
Our three primary software packages are QuickBooks SimpleStart, QuickBooks Pro and QuickBooks Premier. Learn more about these packages on our website to discover how they can help your business perform important bookkeeping tasks.
5 FAQs of petty cash accounting
To handle your petty cash procedures efficiently, remember to ask yourself the following questions:
- Who will be responsible for your petty cash accounting?It’s advisable to have two or fewer people in charge of your petty cash. This way, it’s easier to keep track of where the money goes. One employee should physically handle the money and another employee should record the transactions because they’re likely to hold each other accountable.
- How should petty cash transactions be recorded?With QuickBooks accounting software, it’s easy to record all your financial information. Remember that every transaction must be recorded and should include the date, transaction amount and general description of the purchase, for example “coffee, milk and sugar for daily use”.
- How often should my petty cash be replenished?Timing obviously differs from business to business. Some businesses only replenish their petty cash once a week or once a day, depending on how much the business spends. Estimate how much is used per day to ensure that you have the right amount available on a daily basis. It’s also advisable to keep a limited amount in the petty cash safe to lower chances of temptation of theft.
- What can I purchase with petty cash?This decision is up to the business owner. Most businesses use their petty cash to make change and pay for small transactions. You can also set a limit on the amount available per transaction, therefore all purchases higher than a certain amount (e.g. R200) must be done in form of an actual transaction.
- What do I do if I suspect someone is stealing from my petty cash fund?It’s a business owner’s responsibility to set up efficient policies regarding the use of petty cash. Unless you have solid proof, it’s unwise to confront an employee about stealing from the petty cash fund. Rather make a public statement that you have restricted access to the petty cash, owing to missing amounts. If you do have proof, it’s important to contact your business attorney before making accusations or calling the police. With QuickBooks, transactions are recorded in such manner that the moment there’s an imbalance, you’ll notice immediately.
Petty cash accounting is easy with QuickBooks
Choose QuickBooks to manage your company’s petty cash procedures and take advantage of our easy-to-learn software. You don’t need training or qualifications to use our programs as they include step-by-step tutorials to assist you.
Contact us for more information on petty cash accounting and QuickBooks accounting software.