We have had a number of requests about how to handle petty cash in QuickBooks. Although we touched upon this subject in one of our October blogs, it was an overview of the subject.
Tracking petty cash transactions can easily turn into a nightmare if you don’t stay on top of it. We have seen petty cash managed well and managed not-so-well by non-profits and for-profits alike. Have a responsible person in your office maintain a log with dates/names/amounts of cash that is removed and put back in the cashbox at all times. Ideally, this person is not the same person who is requesting the petty cash. In QuickBooks, your Petty Cash account transactions should be able to recreate the flow of funds coming in and going out. And, ultimately, the balance in your QuickBooks Petty Cash account should equal how much petty cash is in the cashbox of your office.
Here’s an example setting up the QuickBooks Petty Cash account :
1. Set up Petty Cash in QuickBooks Chart of Accounts as a Bank type
2. $200 cash is withdrawn from business’s checking account and put in the office cashbox: in Write Checks window enter check number or “ATM” and select Petty Cash account from drop down window on bottom part of the check form
Here’s an example of how to handle a cash purchase occurring on the same day as the cash request:
1. “Mary the Manager” requests petty cash from the office cashbox in order to buy some paper for the office.
2. “Mary the Manger” gives the store receipt and change from her purchase to “Betty the Bookkeeper”. If there is a special Customer:Job or Class to be used, “Mary the Manager” records this information on the back of the store receipt.
3. Any money that “Mary the Manager” has leftover from her purchase is brought back to the cashbox.
4. “Betty the Bookkeeper” opens the Petty Cash Register or Write Checks (selecting the Petty Cash bank account, of course!) window in QuickBooks and enters ”Mary’s” purchase transaction.
5. “Betty the Bookkeeper” files the receipt with the rest of her petty cash records
