Petty cash is one of the smartest QuickBooks features that help you to easily pay for your business small expenses. This article gives a complete overview of how to set up petty cash in QuickBooks and more about it.
- 1 What is Petty Cash?
- 2 Advantages of Petty Cash in QuickBooks
- 3 How to Control Over Flow of Cash
- 4 Procedure to Set Up A Petty Cash Account in QuickBooks
- 5 How to Manage Petty Cash
- 6 How to Do Cash Accounting and Recording in Petty Cash?
- 7 FAQs
What is Petty Cash?
It is a convenient way to manage your business expenses in QuickBooks. Petty cash is the best function where you can easily track all expenses and accounting data by creating a petty cash account.
You are required to set up your account, transactions, minor expenses, records and accounting. Petty is generally used in cash and for daily expenses. This software is one of the best cash books that are usually used in bookkeeping.
Advantages of Petty Cash in QuickBooks
Here know all the possible advantage that how it helps you in your business accounting work.
Some of them listed:
- Petty is like the owner’s wallet, so they can use it whenever appropriate.
- Holding cash in the wallet is not secure nowadays, but keeping money in the petty account is much more secure.
- Petty cash handles all expenses and it shows in the balance sheet immediately.
- On QuickBooks petty accounts you can reconcile your petty cash on a regular basis. It cuts down the paperwork
- It’s a very easy to use and convenient way to receive your money whenever you need it.
How to Control Over Flow of Cash
If you want that you should not spend much money then it is advisable that you should save your money and do not waste it so for this just follow the steps below that how you can control the flow of cash:
- Withdraw the lump sum amount from cheque.
- Record of your expenses should be made so that after that you don’t have to face the confusion.
- Sometimes it is advisable that amount which you have spent should be keep a track of that while the amount which you have deposited in the box.
Procedure to Set Up A Petty Cash Account in QuickBooks
You’ll find the steps guide to how to create a petty cash account with ease. You can track your cash with the help of this account and can see all moving cash from your bank account into petty cash.
Total Time: 3 minutes
Go to Chart of Accounts
The very first step, open settings and then click on Chart of Accounts
Select New option
Next, select the New option
Select the bank
Select the bank using a drop-down menu within Account Type
Select Cash on hand
After that select Cash on hand from the Detail Type with help of the drop-down menu.
Type Petty Cash
Type petty cash in the place of the account name
Generate Opening Balance
The opening balance can easily generate by writing a check or moving funds when you move money from the checking account.
Enter the amount in the Balance field
If you already have money for small cash to use, enter the amount in the Balance field, and select the date which is correct.
In the end, select and click the save and close button.
#Tips : How to Record Cash Purchases in QuickBooks? if Needed.
How to Manage Petty Cash
Once you create your petty account then you can put some money. Here are the steps to get started and keep up-to-date everything in petty cash.
1. Put Cash In
- Withdraw some cash from your created account and then place it in the locked box
- Keep a record of the withdraw transaction in QuickBooks
- In case, you write a check for cash
- Select + New
- Select Check
- Select Petty Cash in terms of the payee, if petty cash is not available in the payees’ list then click on +Add new
- In case, you withdraw the cash without writing a cash
- Select + New
- Select Transfer
- In case, you write a check for cash
2. Take Cash Out
When you send the employee cash, we make a record with a slip that includes to whom, how, where, and for what the money has been used. This is like a ledger used to keep track of the cash you had.
The sum on a paper slip and the cash left over will add up to the amount you deposit in the box all the time.
3. Uses of Petty Cash
This is very convenient to provide funds with ample cash to cover small expenses to the business units.
How to Do Cash Accounting and Recording in Petty Cash?
This account involves setting up small cash policies, setting up a cash log, and creating journal entries. With bookkeeping tools and an expense slip, accounting can be performed manually.
Record is the main element of petty cash as it holds all records of withdrawal of the money and brings it into the cash box. It is nothing but the bookkeeping of every single transaction.
Worth To Read : How to Add Old Expenses Already Paid into QuickBooks?
How to contact us?
This petty cash allows you to prepare everything for regular or on daily basis office expenses, bills from food to tips, and more. It also allows you to keep a better track of all your tax-deductible purchases.
Furthermore, if you are looking for more detailed information then connect with QuickBooks technical support toll-free helpdesk number ?smbaccountants.com. They assist all round the clock with their availability and avail you the best appropriate solution for your problems.
Why is it known as Petty Cash in QuickBooks?
Petty Cash is derived from the “Petty” word which means “Minor”. In other words, “Petty Cash” was a small amount of cash that was set aside for small purchases, much less for the manufacture and encasement of cheques.
How Cash is different from Petty cash?
Petty Cash is the fund for purchasing small expenses for your business while cash is the sum of all available cash for your business.
How to create the Petty Cash Bank Account in QuickBooks?
In the beginning, navigate to the Chart of Accounts that you find on the bottom left-hand corner. Click Account, and then choose New. For a new account type, select Bank in the Account field and write Petty Cash as the account name. Keep the opening account balance as zero and select Save & Close at last.
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