A Petty Cash Account is used to manage small business expenses efficiently. Funds are transferred from the company’s bank account into petty cash, allowing quick payments while keeping track of the transactions.
Create a Petty Cash Account
To start managing petty cash, you need to create a dedicated account in the system:
Go to Bank > Accounts.
Click + New.
Name the account "Petty Cash" and save it.
You can maintain a single petty cash account to record all petty cash expenses in one place, regardless of the staff member using it.
Alternatively, if you want to track individual staff spending separately, you can create a petty cash account for each staff member, naming them accordingly, such as "Petty Cash - Alex" or "Petty Cash - Jamie".
Transfer Money to Petty Cash
To ensure petty cash is available for expenses, the company transfers funds from its company bank account. This process is also known as replenishing petty cash.
To record the transfer:
Go to Bank > Transfer.
Select the "Transfer From" account (your company bank account).
Select the "Transfer To" account (your petty cash account).
Enter the Amount and save the transaction.
Record Expenses Paid with Petty Cash
Whenever petty cash is used to pay for business expenses, it should be recorded accurately. Common petty cash expenses include office supplies, staff reimbursements, and small business-related purchases.
Go to Bank > Money Out, or the relevant module based on your transaction type.
Select the Expense Account.
Choose Petty Cash as the Payment Account.
Enter the Amount and save the transaction.
Tracking Petty Cash Account Transactions
To monitor all transactions related to a petty cash account:
Go to Reports > All Reports > General Ledger.
In the Account(s) field, select the relevant Petty Cash account.
The report will display all petty cash inflows and outflows, helping you keep track of expenses.
