There will be several moments in your small or big business operations where you will need a small amount of cash or wish to make the payment to make things smooth over. And, of course it is not always practical to pay for small purchases with a check or Credit Card. You should have some cash handy with you and that should be recorded as well to ensure your records and not missed out. Learn how to enter petty cash receipts in QuickBooks.
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Petty Cash Can be Used for:
Mostly petty cash is used for all the small and big business requirements like Systems, Office Supplies, Stamps, Postage, Stationery, Daily Wages, Carriage and etc. Such expenses are incurred day after day and need to be taken care of on an immediate basis. Availability of petty cash taken care of every small expense.
In any business, there is petty cash for these purposes. When you purchase something using petty money or your cash drawer, with QuickBooks you can still record these expenditures. If recorded properly in QuickBooks, then you can track your cash Expenses and also connect several purchases to their proper accounts. All you need to do is to set up a petty cash account. In this account, you will end up entering receipts which is a fast and an efficient approach. You will always have accurate records in no time at all. This can be taken care of in few steps, which are as follows:
When you are moving your cash from the bank account to be deposited into the petty cash, you should see it in this account. Here is how you can create a setup for the same:
- Go to the Gear Icon of Settings and Click on the Chart of Accounts.
- Choose the New Action Tab.
- From the Drop-down, Choose Account Type and Select the appropriate Bank.
- Another Drop-down of the Detail, You need to Choose Cash on hand.
- Then Enter Petty Cash as the Account Name.
- With this, The Opening Balance will be created after moving your money from the Checking Account. By Writing a Check or Transferring Funds, you will have An Opening Balance for this Account. If you already have the Spare Money to Use as a Petty Cash, then you should Enter the Amount in the Balance Field and Choose the Current Date. This will act as an Opening Balance for the Account.
- Finally, You Need to Select Save and Hit the Close Button.
Management of Petty Cash in Business
A separate account has been created for the same, now it will be the perfect time to put some money in it. Here you can get started and keep up with everything you do in Petty Cash.
Important Tip: You should designate one person who will handle all the issues related to the petty cash box and keep track of each withdrawal at your company.
Adding Cash Payment in the Account
- You just need to Withdraw some Cash from Your Checking Bank Account and put it in a locked Cash Box named as Petty Cash.
- Then, You need to Record the Transaction Named as Opening Balance in QuickBooks Online.
If you have Written a Check for Cash Withdrawal:
- You need to Select the New Tab Action.
- Choose the Cheque option.
- You should select Petty Cash in the Name of the Payee. Then you need to Select Add New Button, if Petty Cash isn’t in the List of Payees.
If you have decided to take out the cash without a cheque:
- You need to Select New tab again.
- Choose the Transfer Button.
- Take Cash out for Processing Business Operations.
When you are offering cash to an Employee or using the petty cash yourself, you need to record it with a slip of paper. This will enable you to track all the 5 Ws like who, when, where and why the money was used. This is exactly like a receipt which lets you track the cash payments that have been taken out.
With QuickBooks, you can record taking cash from petty cash with the name of Expense with petty cash as the payment account. The amounts on the paper slips as well as the remaining cash left in the petty cash box should add up to the deposited amount. You will be able to see the expenses and deposits separately.
Tip: It is always a good approach to reconcile your petty cash account regularly. Once you process this, you can easily move your records from paper, because the transactions are in QuickBooks. This will make your records more efficient as you are well aware of each and every small and big cash payment which has been used for your business benefits. The more intricate it seems the easier it is and the best part is the less time consumption.
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Frequently Asked Questions (Faqs)
Can You Enter Receipts into QuickBooks?
Yes you can enter receipts as well. Using the QuickBooks Desktop, You can simply upload your receipts to the QuickBooks account. QuickBooks will pull all the related information from the receipt. While this process already existing transactions that are matched will appear. Then you can review and approve the matched transaction.
Does Petty Cash Need Receipts?
Logically, Petty cash is not usually a significant expense for your business. You may require that employees maintain a running petty cash log entry that includes every transaction and receipt. Each log entry in the petty cash book should be including all the required details like the date, the amount, and what was purchased with the petty cash.