How to setup a petty cash book for your small business. The adams money and rent receipt book is the perfect solution for any small business or service provider. These petty cash expenses are recorded in the petty cash book. Many businesses keep a petty cash fund to pay for small daily business expenditures such as office supplies. This 2part carbonless book can be used to document the receipt of petty cash. Learn the right way to set up a good system and understand its effects on taxes. Most cash should be deposited right away in the bank, but a small amount can be kept on hand in a petty cash account earmarked for minor. Do you need petty cash anymore for your small business. Petty cash is a small amount of cash that any business can keep on their premises in a lockable container. The sum of money so kept in hand generally termed as petty cash and book in which the petty cash expenditures are recorded is. It is another cash book which is maintained, generally, in large business. For this purpose, a petty cashier is appointed by the firm, to pay for small payments usually below rs. Writing a check for such items is timeconsuming and expensive. Click here to download all accounting excel templates for rs 199.
Petty cash book the cash book as seen above is used for recording all major payments. Thus, the book is part of a manual recordkeeping system. It works as a book of original entry as well as a ledger account. We explain the basics of cash book accounting here. Log petty cash expenditures using this accessible form. In the past, business owners used petty cash for small business or daytoday expenses, such as a stamp or cup of coffee. Petty cash is a small amount of money for small expenses. Its also been referred to to as a petty cash fund, while the person responsible for cash is known as the petty cash custodian. In large business houses, the cashier has to handle every day a large number of receipts and payments and if in addition to this he is further saddled with petty cash payments, his position becomes embarrassing.
The business transactions must be tracked during development and processing. What is a cash book definition, explanation and types. Petty cash is a convenient store of funds, kept aside for small everyday. Petty cash book is an accounting book used for recording expenses which are small and of little value, for example, stamps, postage and handling, stationery, carriage, daily wages, etc these are expenses which are incurred day after day. The petty cash book is maintained by separate cashier known as petty cashier. Everyone should log their expenses to keep books accurate and gain. You need to develop a set of policies or procedures dictating the handling of cash in your business to avoid problems such as theft and misappropriation. For this purpose, a petty cashier is appointed by the chief cashier. Two types of petty cash book maintained by small or.
In a imprest system, a cashier is provided a small amount to meet the petty expenses of a given period and is authorized to make such payments and to record them in a separate cash book. Using petty cash for your small business patriot software. There are three procedures that govern petty cashsmall business expense reimbursements at old dominion university. Generally, in all business houses, payments are made by cheque for battery control over cash. Procedure 6810 petty cash and small business expense procedures outlines the procedures that must be followed by individuals who wish to be reimbursed for nontravelrelated reimbursable expenses.
It is easy to set up and will save you from writing a lot of small checks or using your personal funds. Petty cash book definition, types, format, examples. In most cases, the petty cash book is an actual ledger book, rather than a computer record. Ledger for petty cash record keeping large 120 pages business accounts petty cash log book. Start a petty cash fund by writing a check drawn on your company to petty cash. Give the receipt to your finance department or the person who handles your small business books. Every small business needs a petty cash account for small, daily business expenses as part of your bookkeeping function and. Petty cash book is the accounting book that is used for the purpose of recording the petty cash expenditure i. Petty cash is often used for meeting refreshments, reimbursing an employee for office supplies she purchased, or other miscellaneous expenses that require payments in cash or coin.
Instead of writing out a check, it was just more efficient to pay in cash. Payments in cash of small amounts like traveling expenses, postage, carriage etc. Petty cash book definition the petty cash book is defined as relatively small amount of cash kept at hand for making quick payments for miscellaneous small expenses in the business concern. Petty cash meaning, examples accounting for petty cash. Petty cash, or petty cash fund, is a small amount of cash your business keeps on hand to pay for smaller business expenses. Like any other type of transaction, you must record petty cash transactions in your small business accounting books. For example, you might send an employee to pick up office supplies, like staples or printer paper. You would use your petty cash fund to reimburse your employee for the purchase of the supplies. The economic activities of any business involve a regular inflow and outflow of cash and cash equivalents. The cash can be kept in a small safe or locked file cabinet, perhaps in an manila envelope. How to set up and maintain a petty cash account basic. Petty cash is a small amount of money kept aside for the daytoday expenses in your business. Adams business forms were designed to help businesses itemize and organize customer information.
Petty cash, also known as cash on hand, refers to small amounts of cash kept on hand in a business. A petty cash account is simply money kept on hand to pay for minor cash items such as stamps, office supplies, tips, parking tolls, etc. To set up and maintain a petty cash fund, you must fund it with monies from your business. Most people use petty cash for things like buying office supplies, paying for postage, and so on. The cash book is 100% free for you to download and use forever, and it is fully customizable so you can change anything in it. Every business makes small purchases each day for items such as office supplies, stamps, shipping charges, and other miscellaneous items. Petty cash is a convenient alternative to writing checks for smaller transactions. Petty cash book meaning, cash book vs petty cash book. Petty cash book format example definition explanation. Petty cash should be properly controlled with a petty cash log and accurately entered into the bookkeeping system in exactly the same way you would maintain a bank account. This template includes date, receipt, description, deposits, and withdrawals.
The petty cash book is a recordation of petty cash expenditures, sorted by date. Uses of petty cash book its a cash book used to enter daily petty expenses. Petty cash financial accounting simple book production. This excel cash book is suitable for any small business that wants an easy bookkeeping method a simple way to track your income and expenses.
Two types of petty cash book maintained by small or large companies for easy, quick and accurate recording of all cash transactions. To pay for small purchases which require cash, such as food for the office lunch or coffee supplies, or for parking. Petty cash means the small amount that is allocated for the purpose of paying the small expenses which the company occurs in its day to day operations where it is unreasonable to issue the check and for managing the same custodians are appointed by the company. The firm may adopt imprest system of maintaining petty cash. It is another cash book which is maintained, generally, in large business concerns to reduce the burden of main cash book, in which numerous transactions involving petty small amounts are recorded. Petty cash book system are also called as imprest system. Petty cash is important for your small business finances. Click here to download simple cash book excel template. To improve the way you handle petty cash accounting, require a petty cash receipt for each transaction. It is an accessible, convenient way to pay for small purchases. When a business doesnt provide access to company credit cards, or employees would rather not wait to be reimbursed for purchases, using petty cash is a simple alternative. The simplest way to do this is to write a check to petty cash using. But the payment of small expenditures like, stationery, traveling, postage, telegrams, office teas and newspapers by cheque are impartial.
Small businesses mainly setup a petty cash book for convenience, as sometimes you need a quick alternative to use in place of your companys regular payment process. Petty cash is a system that funds and tracks small purchases such as parking meter fees that arent suitable for check or credit card payments. There are two primary types of entries in the petty cash book, wh. At times, every business finds it convenient to have small amounts of cash available for immediate payment of items such as delivery charges, postage stamps, taxi fares, supper money for employees working overtime, and other small items. Numerical columns automatically total and include received by, approved by, date, and more. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel. If you find that youre faced with cash expenses more or less often. How to do petty cash accounting with business credit cards. Petty cash book is a type of cash book that is used to record minor regular expenditures such as office teas, bus fares, fuel, newspapers, cleaning, pins, and causal labor etc. Ledger for petty cash record keeping large 120 pages business accounts petty cash log book 9781074311896. Petty cash book 2019, imprest system of petty cash. Petty cash book is a ledger book, which is used to record petty cash expenses formally in chronological order, with the date. Petty cash book explanation, format, example, ordinary and imprest.
So what are some examples of petty cash expenses in a business. Petty cash book can be expressed as a formal summarization of the petty cash expenditures which refers to the daytoday normal. For smallscale business, simple petty cash book is sufficient but on a medium or large scale business number of petty expenses increases hence it is desirable. There are numerous small payments on account of expenses like stationery, cartage, coolie hire, refreshments to guests etc. And, create a petty cash slip indicating the amount, employees name, and date when you give employees petty cash. The book in which those small payments are recorded, which are not convenient to record in main cash book, is called petty cash book explanation. Petty cash accounts for your small business dummies. In big business firms, all payments are made by cheques and all receipts are banked. Besides maintaining a main or general cash book, many companies also maintain a small cash book known as petty cash book to record small day to day expenditures of the business. Small or large companies maintain 2 types of petty cash book for all cash transactions of a business.
Petty cash is a small amount of cash kept on hand to cover expenses that are too small to bother writing a check. Managing a petty cash account for your small business. The first row is for the company name and second for the title of the template. Petty cash book is the cash book which involves small cash payment and receipt during daily business operation. Petty cash expenses include office supplies, catered lunches, postage, cab fares or even a simple cup of teacoffee. There might be a petty cash drawer or box in each department for. The petty cash helps accountants to process some small and routine payment without authorization from. It is recorded in a separated chart account which enables to reconcile daily between accounting record and logbook.
The cash book is used to record receipts and payments of cash. Perfect for maintaining accurate business accounts and monitoring petty cash flow. A business uses a petty cash account for tracking physical cash used to make small payments. The sum of money so kept in hand generally termed as petty cash and book in which the petty cash expenditures are recorded is termed as petty cash book. It depends on the nature, volume and necessity of transactions of a business organization. Petty cash accounting involves establishing a petty cash policy, setting up a petty cash log, creating journal entries, and reconciling the petty cash account. Have our partners at excelchat fix your formulas, 247. In almost all businesses, it is found necessary to keep small sums of ready money with thecashier or petty cashier for the purpose of meeting small expenses such as postage, telegrams, stationary and office sundries etc. Petty cash or the petty cash fund is a small amount of cash on hand used for paying expenses too small to merit writing a check. Petty cash is a small amount of cash that a business has on. The person who is maintaining petty cash book is called as a petty cashier.
1358 811 312 26 612 366 869 298 1200 612 56 1511 947 1348 1228 919 140 624 705 520 835 1397 646 261 1404 448 540 1316 699 379 496 206 463 643 470 1393 151 1071 1158 682 110 1109 1001 640 636 530 630 465 498