Are you looking for ways to better manage your bookkeeping business's petty cash?
If so, you're not alone - inappropriate petty cash management is a common problem.
But with the right system in place, you can ensure that all petty cash transactions are accounted for and funds are used appropriately.
Here are 5 simple steps you can take to improve your petty cash management:
1. Establish a Petty Cash Fund: Set up a separate bank account with a specified amount of money allocated to it.
This amount should be determined by the company’s needs and should be reviewed regularly to ensure it is sufficient.
2. Set Clear Policies and Procedures: Establish clear policies and procedures regarding the use of petty cash.
These should include who is allowed to access the fund, what types of expenses can be paid from petty cash, and what documentation is required for each transaction.
3. Ensure Proper Documentation: All transactions should be documented and tracked using a petty cash log or spreadsheet.
This should include the date of the transaction, the amount, the payee, and a description of what the money was used for.
All receipts should be kept for auditing purposes.
4. Reconcile Regularly: Reconcile the petty cash fund on a regular basis, usually monthly.
This involves comparing the amount of money in the fund to the amount that is recorded in the petty cash log.
Any discrepancies should be investigated and resolved.
5. Monitor Usage: Regularly monitor the fund to ensure that it is being used appropriately.
Any unusual or suspicious transactions should be investigated.
By following these steps, you can ensure that petty cash is managed appropriately and that all transactions are properly documented and tracked.
With a clear system in place, you'll be able to rest assured that your bookkeeping business is in good hands.