QuickBooks is the most famous small business accounting software that business owners use to handle income and spending and maintain track of the financial health of their firm. It can bill customers, pay invoices, generate reports, and prepare taxes. QuickBooks offers a variety of suitable solutions for anyone, from a freelancer to a medium-sized organization.

QuickBooks has numerous alternatives, but for most new businesses, we prefer QuickBooks Online. QuickBooks Online is available for free with a 30-day trial that does not require a credit card.

Features of Quickbooks

Quickbook accounting software’s primary features or functions are as follows:

  1. It aids in inventory management for enterprises.
  2. Services are being ordered.
  3. Employee supervision and training
  4. Reminders should be scheduled.
  5. Calculate your tax payment.
  6. Keeping track of spending.
  7. Invoicing is in progress.

What is Petty Cash?

A petty cash fund is a small quantity of company cash that is frequently kept on hand (for example, in a secured drawer or box) to pay for minor or incidental expenses such as office equipment or employee reimbursement. A petty cash fund will be reconciled regularly, and transactions will be noted on the financial accounts. Each department in a more prominent firm may have its little cash fund.

Petty Cash is useful for modest transactions where writing a check or a company credit card is impractical or inappropriate. The amount of Cash that a corporation considers petty varies, although many hold between $100 and $500 as a petty cash fund. A petty cash fund may be utilised for the following transactions:

  1. Supplies for the office
  2. Customer greeting cards
  3. Flowers
  4. Purchasing a catered luncheon for a specific team
  5. Providing reimbursement to an employee for minor work-related expenses

How to Create a Petty Cash Account

This is how to set up a petty cash account. When you transfer money from a bank account to petty Cash, it should appear in this account.

  1. Choose Chart of accounts from the Settings menu.
  2. Choose New. Based on your account, you’ll get either an Account or a New category window.

 For your next steps, follow the steps shown below.

Account Window

  1. Select Bank from the Account dropdown menu.
  2. Select the amount of cash from the Detail Type menu.
  3. For the account name, type Petty Cash.
  4. The opening balance is calculated when you withdraw money from your bank account by writing a check or transferring money. If you have money set aside for petty Cash, enter it in the Balance area and select the date.
  5. Choose Save and close.

New Category Window 

  1. For the Category name, type Petty Cash.
  2. Pick Bank & credit cards from the Select Category dropdown menu.
  3. Choose Select.
  4. Select Cash on hand from the Account Type selection.
  5. The opening balance is calculated when you withdraw money from your bank account by writing a check or transferring funds. If you already have money set aside for petty Cash, enter the Commencement date and the amount in opening balance section as of date.
  6. Choose Save.

How to Handle Petty Cash?

Now that you’ve established the account, it’s time to fund it. Here’s how you get started and stay organized with petty Cash.

 At your organization, designate one person to oversee the petty cash box and maintain a note of each withdrawal.

Put money in

Withdraw money from your checking account and deposit it in a secure cash box. The transaction should then be recorded in QuickBooks Online.

If you wrote a paper check, 

  1. Select +New.
  2. Tap “Check”
  3. Make Petty Cash the payee. If petty cash isn’t on the list of payees, click +Add new.

If you take out Cash without a check,

  1. Choose +New.
  2. Choose Transfer.

Take money out

When you provide Cash to an employee or utilize petty Cash, keep a note of who, when, and what the Cash was used for with a slip of paper. This serves as a receipt for the cash you withdraw. Taking Cash from petty Cash should be recorded as an Expense in QuickBooks, using petty Cash as the payment method. The sums on the slips of paper and the Cash you have left should always total the amount you deposited in the box.

Reconciling your petty cash account regularly is a brilliant idea. Because the transactions are now in QuickBooks, you can transfer the paper slips to your long-term record keeping.

Conclusion

Petty Cash is a small quantity of cash held on the premises of a business or firm to cover minor expenditures and needs—usually no more than just a few hundred dollars. While it is simple to grasp and use, petty Cash is prone to abuse, is easy to misplace, and is open to theft. Some argue that the petty cash fund is obsolete in today’s society: there are plenty of safer and more convenient options for modest purchases.