Recording petty cash transactions

Many businesses have a petty cash account for everyday purchases or costs, such as office supplies, parking charges and petrol. It’s not always appropriate to write a cheque or use a credit card for these expenses, as it may be a reimbursement to an employee or to purchase items for small amounts.

We recommend that you

Create a petty cash account

  1. Go to Banking, then click New then Bank Account.
  2. In the Account Type list, click Cash in Hand.
  3. Enter an account name, for example, Cash register.
  4. Click Save.

Record the opening balance of the petty cash account

The petty cash account usually has an opening balance figure, this may be transferred from one of the other bank accounts, current or till takings, or it may come from a director’s account. You can record this as a bank transfer by completing the following steps:

  1. Go to Banking, then click New then Bank Transfer.
  2. Complete the following information:
Paid from Bank Account * Choose the bank account you want to transfer funds from.
Paid into Bank Account * Choose the petty cash account.
Method Choose the payment method used.
Amount Transferred * Enter the amount to be transferred.
Date Transferred * Enter the date for the transaction.
Reference (optional) If required, enter a reference for the transaction.
Description If required, enter a description for the transaction.
  • These details are compulsory.
  1. Click Save.

Record any payments that have been made

If you record the payments made from petty cash it means you can keep track of what has been spent and the balance that should be left. You can do this at any time.

  1. Go to Banking, then click the relevant bank account.
  2. Click New Entry, then click Purchase / Payment.
  3. Click the Other Payment tab, then check or enter the following information:
Paid from Bank Account * Choose the petty cash account.

Note: The current balance for the selected bank account displayed below this box.
Method * Click the required payment method.
Date Paid * Enter the date of the payment.
Reference (optional) If required, enter a reference for this payment.
Amount Paid * Enter the total amount of the payment.
Ledger Account The default purchase ledger account appears. If required, you can change this.
Details If required you can enter more details about the purchase, such as what the item you purchased was.
VAT Rate Select No VAT.
Total This defaults to the value you entered in Amount Paid. You can amend this if required.
  • These details are compulsory.
  1. Click Save, or to add another payment:
  • Click on the Save arrow, then click Add Another and repeat steps 3 to 5 for any other expenses that have been paid from petty cash.

You’ve successfully recorded your payment and it appears on the list of transactions for the relevant bank account. If this is a payment you make regularly, for example once a week or once a month, you can now record this as a recurring entry.

Transfer money to restore the balance on the account

When the balance on the petty cash account falls below a certain balance ,you may need to take some money from the till or out of the current bank account to restore the balance.

This is recorded as a bank transfer. For further information about this, please refer to the section above Record the opening balance of the petty cash account.

If you transfer the balance from another petty cash account, you can also record this as a bank transfer.