How to Setup Petty Cash in QuickBooks Desktop?

Petty cash is one of the smartest QuickBooks features that help you to easily pay for your business small expenses. This article gives a complete overview of how to set up petty cash in QuickBooks and more about it.

What is Petty Cash in QuickBooks Desktop

It is a convenient way to manage your business expenses in QuickBooks. Petty cash is the best function where you can easily track all expenses and accounting data by creating a petty cash account.

You are required to set up your account, transactions, minor expenses, records, and accounting. Petty is generally used in cash and for daily expenses. This software is one of the best cash books that are usually used in bookkeeping.

Advantages of Petty Cash in QuickBooks Desktop

Here know all the possible advantages that how it helps you in your business accounting work.

Some of them are listed:

• Petty is like the owner's wallet, so they can use it whenever appropriate.
• Holding cash in the wallet is not secure nowadays, but keeping money in a petty account is much more secure.
• Petty cash handles all expenses and it shows in the balance sheet immediately.
• On QuickBooks petty accounts you can reconcile your petty cash regularly. It cuts down the paperwork
• It's a very easy-to-use and convenient way to receive your money whenever you need it.

How to Control Over Flow of Cash

If you want that you should not spend much money then you should save your money and not waste it so for this just follow the steps below to how you can control the flow of cash:

• Withdraw the lump sum amount from the cheque.
• A record of your expenses should be made so that after that you don’t have to face confusion.
• Sometimes the amount which you have spent should be kept track of that while the amount which you have deposited in the box.

Procedure to Set Up A Petty Cash Account in QuickBooks Desktop

• Go to Chart of Accounts: In the very first step, open settings and then click on Chart of Accounts.
• Select New option: Next, select the New option.
• Select the bank: Select the bank using a drop-down menu within Account Type.
• Select Cash on hand:  After that select Cash on hand from the Detail Type with the help of the drop-down menu.
• Type Petty Cash: Type petty cash in the place of the account name.
• Generate Opening Balance: The opening balance can easily be generated by writing a check or moving funds when you move money from the checking account.
• Enter the amount in the Balance field: If you already have money for small cash to use, enter the amount in the Balance field, and select the correct date.
• Click the Save and Close button: In the end, select and click the save and close button.

#Tips : How to Record Cash Purchases in QuickBooks? if Needed.

How to Manage Petty Cash

Once you create your petty account then you can put some money. Here are the steps to get started and keep up-to-date with everything in petty cash.

1. Put Cash In

1. Withdraw some cash from your created account and then place it in the locked box
2. Keep a record of the withdrawal transaction in QuickBooks
   • In case, you write a check for cash
     1. Select + New
     2. Select Check
     3. Select Petty Cash in terms of the payee, if petty cash is not available in the payees’ list then click on +Add new
   • In case, you withdraw the cash without writing a cash
     1. Select + New
     2. Select Transfer

2. Take Cash Out

When you send the employee cash, we make a record with a slip that includes to whom, how, where, and for what the money has been used. This is like a ledger used to keep track of the cash you have.

The sum on a paper slip and the cash left over will add up to the amount you deposit in the box all the time.

3. Uses of Petty Cash

This is very convenient to provide funds with ample cash to cover small expenses to the business units.

How to Do Cash Accounting and Recording in Petty Cash?

1. Accounting:

This account involves setting up small cash policies, setting up a cash log, and creating journal entries. With bookkeeping tools and an expense slip, accounting can be performed manually.

2. Recording:

Record is the main element of petty cash as it holds all records of withdrawal of the money and brings it into the cash box. It is nothing but the bookkeeping of every single transaction.

Worth To Read : How to Add Old Expenses Already Paid into QuickBooks?

How to contact us?

This petty cash allows you to prepare everything for regular or daily office expenses, bills from food to tips, and more. It also allows you to keep a better track of all your tax-deductible purchases.

Furthermore, if you are looking for more detailed information then connect with QuickBooks technical team at smbaccountants.com. They assist all round the clock with their availability and avail you of the best appropriate solution for your problems.

Frequently Asked Questions