To have petty cash in the office or at work is handy when comes to paying petty cash expenses. For example, office stationery, cleaning stuff, materials, staff taxi fares reimbursement and so on.
It is essential to maintain a petty cash account to account for the cash withdrawn from your company bank account for use as petty cash and expenses paid out of your petty cash.
Regular reconciliation of your petty cash is recommended to ensure your cash receipts and expenses are tied up.
There is a number of ways to record your petty cash transactions.
You could issue a petty cash voucher each time you pay out petty cash. as usual, you would ask the person you reimbursing to sign on your voucher. Staple the purchase receipt or the invoice with your petty cash voucher and file them away. Once a month, you could sum these up and put them in the record of your purchases.
Petty cash book
Another approach is to write down the petty cash expenses as they occur in a petty cash book. You may be able to obtain stationery specially designed for petty cash accounting from your local stationery shops. The petty cash book comes with standard columns and rows for easy recording of your petty cash transactions. All you need to do is to fill in the columns.
Use excel to summarize petty cash transactions
A further alternative is to use the excel spreadsheet to create your own petty cash summary form. What you would do is to record your petty cash transactions and staple the receipts and invoices to the summary. Ideally, ask the person you reimburse the money to sign and acknowledged receipt of the cash.
This measure is used to prevent misappropriation and avoid expenses being claimed twice.
Whichever methods you use to record petty cash transactions, you need to record the date the cash was spent, how much it was and what it was for. Similarly, cash received for petty cash, the date receipt and from whom or which bank account.
Your petty cash balance would be included in your company account under cash and bank balances in the balance sheet.