Whether you’re a small business or self-employed, when setting up the accounts, you’ll need to have a petty cash fund to cover small expenses or reimbursements. Think of postage stamps, taxi fares and office supplies - things that are impractical to pay by card are made easier by using petty cash.
From keeping it secure to best practices for general transactions, here’s how to use petty cash the right way.
It is important to have Petty cash because having small amounts of money on hand for business expenses means you don’t have to dip into your own pockets for small purchases. Instead, you can handle these needs relatively quickly without having to dash to the nearest cash machine.
You can use the petty cash however you want as long as it’s for business-related reasons. Typically these expenses are inexpensive and not worthy of a check. Here are some common petty cash purchases:
More and more people are using debit and credit cards for purchases, so the use of a petty cash system is declining. However, it's still essential for any business to make sure you account for all small purchases so that you can deduct them as business expenses.
Just because petty cash amounts are small, it doesn’t mean they don’t require tracking. These little costs can all add up, so it’s important to keep it secure.
Here are some tips on making sure your petty cash is safe and accessible for all your small business needs:
If you’re self-employed, the responsibility to look after the petty cash fund is all yours. It’s not as simple as just keeping it safe;and you need to replenish the cash, store written receipts and keep an accurate record of the transactions.
Even with these best practices, it can be challenging to keep track of something so small, like petty cash especially when there are more pressing business matters demanding your attention. That’s why we’ve created our helpful templates.
When managing finances like petty cash, quite often the most challenging aspect is tracking everything. If you want a more natural way to budget and document effectively, then we’ve got some templates to help you out.
The pack includes templates for profit and loss, cash flow forecast and more. To get your own, click on the link below.