Tuesday, October 4, 2011

Petty Cash

Petty cash is often viewed as random cash with no real procedures. But shrewd business owners need to have as much control over petty cash as they do over the rest of their financials. A few simple rules will help you keep control of your petty cash. First, set an amount to be kept. For every withdrawal, fill out a voucher with the amount taken and attach a receipt of the expense. The amount of vouchers and cash should always equal the original set amount. It’s also a good idea to have one person in control of the cash, usually the bookkeeper, and keep it in a secure place. Make sure employees know what qualifies as a petty cash expense and require receipts for all withdrawals. Petty cash should never be used as personal loans to employees. Use a separate register in your books to account for petty cash and use JE’s to update them regularly. With a few simple steps, you can put into place a great system to protect every penny of your business’s funds.