The Petty Cash account is a financial account used to track amounts given to employees for work-related tasks, such as purchasing supplies or covering expenses. This account is classified under Current Assets in the chart of accounts. Here’s how to add a Petty Cash account and manage its financial transactions.
For example, You own a business and have an employee responsible for purchasing daily supplies. When you give this employee an amount to cover work expenses, record the amount in the petty cash account by entering a manual journal entry. When the employee uses these funds for expenses or purchases, you should add the details to the platform (including invoices and the payment method used to spend the petty cash amount) linked to their petty cash account. The system will automatically generate the journal entries based on the transactions you add. These steps help streamline the tracking and documentation of financial transactions.
Steps to Add a Petty Cash Account
Adding a Main Advance Account
Navigate to:
Accounting > Chart of Accounts > Click "New Account".
Enter the following details:
Account Type: Assets.
Parent Account: Current Assets.
Account Code: Automatically generated or manually assigned based on your numbering system.
Account Name: Example: "Employee Petty Cash."
Description (Optional).
Click "Save."
The account will appear in the chart under Current Assets.
Adding Sub-Accounts for Employees
To track advances for individual employees:
Locate the Parent Account:
In Chart of Accounts, click the three dots next to "Employee Petty Cash."
Select:
"New Sub-Account."
Enter the following details:
Account Type: Current Assets.
Parent Account: Automatically pre-filled as "Employee Petty Cash."
Account Code: Adjust as needed.
Account Name: Example: Petty Cash - Ahmed.
Description (Optional).
Click "Save."
The sub-account will appear under "Employee Petty Cash."
Linking Advance Accounts to Payment Methods
You can link advance accounts to specific payment methods for accurate financial tracking.
Adding a New Payment Method
Navigate to:
Settings > Payment Methods > Click "Add Payment Method."
Enter the following details:
Payment Method Name: Example: "Petty Cash - Ahmed."
Type: Other or Card.
Link Account: Select the corresponding advance account, e.g., 'Petty Cash - Ahmed"
Note: If you select Cash, the default account "Cash on Hand" will be automatically linked.
Click "Save."
The payment method is now available for transactions.
Editing an Existing Payment Method
Navigate to:
Settings > Payment Methods > Click the edit icon (🖋) next to the method.
Update the linked account:
Choose the advance account from the dropdown.
Click "✔" to save.
Confirm Changes:
A confirmation popup will appear. Click Confirm to update the payment method.
Archiving Advance Accounts
To archive an account:
Navigate to:
Accounting > Chart of Accounts > Click the three dots next to the account > Select "Archive Account."
Confirm the Action:
Click "Archive"
If the account is linked to payment methods, a popup will display:
Account Name.
Linked Payment Methods.
Click Confirm to archive the account.
Automatic Re-Linking:
Archived accounts linked to payment methods are automatically re-linked to the default account:
"1010102 Other - Other Bank Accounts."
FAQ
Can I link the same Employee Petty Cash account to multiple payment methods?
Yes, you can link one account to multiple payment methods.Can I delete an Employee Petty Cash account after adding it?
Accounts cannot be deleted but can be archived following the steps above.How can I view the details or statements of an Employee Petty Cash account?
Navigate to: Accounting > Chart of Accounts.
To view details: Click the eye icon (👁️).
To view the statement: Click the notes icon (🗒️).
4. Can I rename or edit the Employee Petty Cash account?
Yes, click the three dots next to the account, select Edit, and update the name, account code, or description. Changes will reflect in all linked payment methods.
5. What happens to transactions when I archive an advance account?
Transactions remain intact, but new transactions will be linked to the default account unless re-linked to another account.