{"id":31845,"date":"2017-05-23T14:15:06","date_gmt":"2017-05-23T06:15:06","guid":{"rendered":"https:\/\/zahiraccounting.com\/en-my\/?p=31845"},"modified":"2017-05-23T15:40:38","modified_gmt":"2017-05-23T07:40:38","slug":"how-to-manage-petty-cash-for-small-business","status":"publish","type":"post","link":"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html","title":{"rendered":"How To Manage Petty Cash For Small Business?"},"content":{"rendered":"

\"How<\/a><\/p>\n

Every business, from small sized, home based, or even big sized ones will always need a \u00a0petty cash fund. Petty cash is to fund the business daily expenses. To Manage petty cash properly and keep tracking all the transactions, it becomes easier for the owner to track tax-deductible expenses, make journal entries, and separate personal from business expenses.<\/p>\n

In the financial statements, petty cash is an account specifically used for small and regular transactions. The characteristics of petty cash include:<\/p>\n

    \n
  1. Limited nominal value as determined by the management\u2019s policy. Each business has the different amount of value based on the company\u2019s operational.<\/li>\n
  2. To fund daily transactions<\/li>\n
  3. Saved in the petty cash box<\/li>\n
  4. Handled by small cash cashier<\/li>\n<\/ol>\n

    Petty cash has a big role for company\u2019s operational. It should be met the company\u2019s daily needs since it is started to the end of the activity. A proper management is highly required to manage petty cash. Improper or any mistakes on the petty cash management will disturb the whole business activities. For instance: if the company run out of petty cash, while the transportation request (gasoline for goods delivery) must be met, the cashier could not provide the cash to the driver. This will cause the delivery delay and have the bad impact to other processes.<\/p>\n

    Below is the steps to manage petty cash:<\/p>\n

      \n
    1. \u00a0Setting the limit of \u00a0petty cash balance<\/li>\n<\/ol>\n

      The petty cash balance must be determined since the beginning of small cash account. It is adjusted to the business needs within a certain period. There are two types of petty cash method as a basis for determining the amount of petty cash balances: (1) imprest method, \u00a0which the amount of petty cash remains the same as the determined balance. Generally, by the end of the period, the cashier will request to refill the petty cash as the amount spent. Therefore the new petty cash expenses are recorded on the refill period.<\/p>\n

      (2) Fluctuating method, \u00a0the petty cash balance is not fixed but fluctuates according to the amount of petty cash expenditure.<\/p>\n

        \n
      1. Determine the small cash cashier<\/li>\n<\/ol>\n

        Once the balance limit is set, the person who is responsible for handling the petty cash should also be determined. There are several criteria to be considered in selecting the cashier, such as mastering the basics of accounting, able to handle transactions in small quantities, honest, consistent, and capable of mastering computer programs such as excel. In addition, the management should also provide training before the cashier starting the job, such as giving the procedure of replenishing petty cash back to the way of petty cash reconciliation and purchasing procedures.<\/p>\n

          \n
        1. Petty cash refill<\/li>\n<\/ol>\n

          After setting the balance limit and petty cash method, Financial Controller orders the cashier to refill the petty cash by withdrawing cash from the bank. Then the fund is handed over to the petty cash cashier, the physical calculation is done, receipt note assigned by the petty cash cashier must be made as the evidence of the handover of responsibility.<\/p>\n

          When the petty cash balance is at the minimum limit, the petty cash cashier must request the petty cash refill to the Financial Controller.<\/p>\n

            \n
          1. Use of petty cash<\/li>\n<\/ol>\n

            Petty cash cashier is only allowed to make a small cash payment, both payment, and purchase which does not need Financial Controller approval. The cashier must make the receipt for any expenses and signed by the person who received the fund. \u00a0The transactions are recorded in petty cash book and receipt note should be kept\/filed.<\/p>\n

            The petty cash cashier should calculate the petty cash value every time the transaction settled. \u00a0After the calculation, the value of petty cash must be matched physically. \u00a0\u00a0It will reduce the time used for daily reconciliation. The Financial Controller must also monitor the petty cash by comparing the physical petty cash with the record to avoid the fraud.<\/p>\n","protected":false},"excerpt":{"rendered":"

            Every business, from small sized, home based, or even big sized ones will always need a \u00a0petty cash fund. Petty […]<\/p>\n","protected":false},"author":11,"featured_media":31889,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[35,36],"tags":[73],"yoast_head":"\nHow To Manage Petty Cash For Small Business? | Zahir Malaysia Blog<\/title>\n<meta name=\"description\" content=\"To Manage petty cash properly, it becomes easier to track tax-deductible expenses, make journal entries, & separate personal from business expenses.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How To Manage Petty Cash For Small Business? | Zahir Malaysia Blog\" \/>\n<meta property=\"og:description\" content=\"To Manage petty cash properly, it becomes easier to track tax-deductible expenses, make journal entries, & separate personal from business expenses.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html\" \/>\n<meta property=\"og:site_name\" content=\"Best Accounting Software in Malaysia | Zahir\" \/>\n<meta property=\"article:published_time\" content=\"2017-05-23T06:15:06+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2017-05-23T07:40:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/zahiraccounting.com\/en-my\/wp-content\/uploads\/2017\/05\/How-To-Manage-Petty-Cash-1080x1080.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1080\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Sri Warni\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/zahiraccounting.com\/en-my\/#website\",\"url\":\"https:\/\/zahiraccounting.com\/en-my\/\",\"name\":\"Best Accounting Software in Malaysia | Zahir\",\"description\":\"The Best Accounting Software\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/zahiraccounting.com\/en-my\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/zahiraccounting.com\/en-my\/wp-content\/uploads\/2017\/05\/How-To-Manage-Petty-Cash-1080x1080.png\",\"contentUrl\":\"https:\/\/zahiraccounting.com\/en-my\/wp-content\/uploads\/2017\/05\/How-To-Manage-Petty-Cash-1080x1080.png\",\"width\":1080,\"height\":1080,\"caption\":\"How To Manage Petty Cash\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html#webpage\",\"url\":\"https:\/\/zahiraccounting.com\/en-my\/31845-how-to-manage-petty-cash-for-small-business.html\",\"name\":\"How To Manage Petty Cash For Small Business? 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