With the flow of money constantly coming and going from your business, it can be easy to overlook some of the smaller aspects of your financial records. For example, petty cash pales in comparison to charging and receiving invoice payments.
However, taking care of your petty cash situation is something that should be looked into regularly. Failure to do so can leave you with a misleading portrayal of your businesses finances, opening the door to faulty bookkeeping, wasteful spending or even theft by dishonest employees. Establishing a thorough protocol for petty cash in your business can help you avoid these problems from occurring in the first place.
Creating an outline for the use of petty cash
First and foremost, establishing clear rules around what petty cash can and cannot be used for is the backbone of good policy.
Ideally, petty cash usage will be limited to small business expenses, such as purchasing postage stamps or printer paper in case of emergency. Furthermore, creating a hierarchy of people who are able to access and authorise these costs will help retain order in the future.
Finally, setting up a certain amount of money to be maintained for petty cash gives you a good baseline to work with, especially for the purpose of small business accounting.
Regularly check the records
Whenever anyone accesses the petty cash for a business expense, ensure there is a record created and kept that can be added into your businesses overarching bookkeeping. This means that when you do regular reviews, you'll be able to track the movement of money through the your software.
For example, the CashManager range from Accomplish allow users to create reports that can illustrate the financial health of their company at a glance.