It is undoubtedly every business has to have petty cash in hands for day-to-day small expenses such as stationery, cleaning stuff, materials, taxi fares reimbursement and so on.
It is essential to maintain a petty cash account to keep track of the cash withdrawn for small expenses and regular reconciliation of the cash to cash receipts and expenses must be carried out ensure records are tied up.
You can deal with petty cash items in a number of ways. You could write a voucher or piece of paper each time you use petty cash and keep the voucher in the petty cash box. If you get a receipt for money you spend, staple this to the back of the voucher. Once a month, you could sum these up and put them in your purchases record.
Another approach is to write down the petty cash expenses as they occur in a book. You may be able to obtain notebook for petty cash accounting from a stationery shop. The petty cash book comes with a standard accounting layout and all you need to do is to fill in the columns.
A further alternative is to keep a sheet of paper in your office and write down the amounts spent at the end of each day and again stapling any receipts to it.
Whichever way you record petty cash expenses, you need to record the date the cash was spent, how much it was and what it was for.
If you are registered for VAT, when you make an entry for your petty cash payments in your accounting record, you will need to know which expense items include the standard rate of VAT and to work out the amount of VAT you will be claiming.
If you require help in maintaining your petty cash and your accounting books, our qualified accountants are more than happy to assist you. Feel free to contact us at info@conciseaccountancy.com.
Concise Accountancy – complete accounting solutions for business
