Petty cash in QuickBooks: It is the way where you can track your petty cash amounts by making a petty cash account. You can set up your account, transact, record, petty expenses and accounting. It is in the form of cash used for expenditures. This software is one of the best cash daybooks used in keeping the book.
Set up and use petty cash in QuickBooks?
A very easy way to set up and use petty cash online. So here are the steps to create a petty cash account when you move cash from your bank account into petty cash.
Here are the steps:-
- Go to the settings and select chart of accounts.
- Select New
- From the account, type drop-down ⇓, and click Bank.
- From the detail type drop-down ⇓, select Cash On Hand.
- In this step enter the petty cash for the account name.
- When you move money from the checking account by writing a check or transferring funds the opening balance will be created.
- Select Save and Close.
Started to manage petty cash
As you had created your account, now this time to put some money into your account. Also, keep updated about your petty cash.
As you know, where you have to put your cash in
- Take some cash from your checking account and put it in a locked cash box.
- Maintain a record of the transaction in QuickBooks Online.
- If I had written a check for cash: choose to create ⊕ and then check. Then choose petty cash as the payee. And then choose ➕ add new. If petty cash is not there in the payees’ list.
- If you didn’t withdraw your cash without writing a check: choose to create ⦽ and then transfer.
Take cash out
- When you give cash to the employee we make a record with a paper of slip. Which contains to whom, which, where and for what the money was used. This is like a receipt that is used to track the cash that you had.
- For all the times, the amount on a slip of paper and the cash you have left should add up to the amount you deposit in the box.
Uses of petty cash
It is helpful for providing funds to the business units with sufficient cash to cover minor expenditures.
How we can do cash accounting and recording in petty cash
Accounting:- This accounting involves establishing petty cash policies, setting up a cash log and creating journal entries. Accounting can be done manually with bookkeeping software and an expense card.
Recording:-Record is the major component of the petty cash as it keeps all the record of withdrawal of the money and put into the cash box. it is bookkeeping of every transaction.
Step 1: Policies and procedures
- It is to assign a person to be in charge of petty cash. It know petty cash custodian.
- There should be someone to whom you can trust to adhere to the petty cash procedures.
- This is to inform all the employees that receipt is mandatory for all the petty cash purchases.
- A scanner will help you to scan your receipt that help you to be safe in future use. In case you lost the receipt.
- The cash account should be monthly basis friendly relation or each time to restore.
- The cash purchase records on a monthly basis in the books to maintain a record.
Step 2: Set up a petty cash log?
This cash log detailed all the deposits and withdrawals made from the petty cash account. It includes all the information and also a brief description. Such as what purchase, to which account is to change, who receives the funds and who grants it. So, you should keep all your monthly information.
Step 3: Record a general record of petty cash
At least once in a month cash transactions should record. As well as you can use accounting software like QuickBooks accounting software and also a spreadsheet to keep track of your income and expenses.
These purchase recorded increase (as a debit) to an expense account and decrease (as a credit)to a cash account
Step 4: Restore the relationship between the cash account
Generally, it keeps all the information of the cash account it keeps all the journal entries for future use. As I believe in you require a receipt of all transactions.
I hope this will help you to understand petty cash and how you can use petty cash in QuickBooks. If you want more discussion on this topic, call our toll-free QuickBooks Online support number.