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Petty Cash Entry: How to Keep Track of Small Expenses

As a business owner or manager, you know that managing your finances is key to keeping your operation running smoothly. One area that is often overlooked, yet can have a big impact, is petty cash entry. Petty cash refers to small expenses that are not large enough to require a check or electronic payment. loans from ira accounts. Examples include office supplies, postage, and minor repairs.

Keeping track of petty cash can be a challenge, but with the right systems in place, it can be done efficiently and accurately. Here are some tips for managing petty cash entry:

Establish a Petty Cash Fund

The first step in managing petty cash is to establish a fund. Decide on a reasonable amount for your petty cash fund based on your typical expenses. This amount should be large enough to cover your needs, but not so large that it puts your finances at risk. You should also establish a policy for replenishing the fund when it runs low.

Create a Petty Cash Log

Creating a petty cash log is essential for keeping track of expenses. This log should include the date, amount, expense category, and purpose of each transaction. You should also assign a unique reference number to each entry to help with tracking and reconciliation.

The log can be kept in a spreadsheet or a physical notebook. Whatever format you choose, make sure it is accessible to both the person responsible for managing the petty cash and any other relevant parties, such as an accountant or supervisor.

Assign a Petty Cash Custodian

Assigning a petty cash custodian is important to ensure accountability and proper record-keeping. 1 hour loans no credit check. The custodian is responsible for managing the petty cash fund, making payments, and maintaining the log.

Choose someone who is trustworthy and has good organizational skills for this role. Make sure they understand your petty cash policies and procedures, and provide training if necessary.

Implement Controls

To minimize the risk of fraud or mistakes, you should implement controls around petty cash entry. For example, you could require two signatures for each transaction, or limit the amount of cash that can be disbursed at any one time. You should also regularly review the log and reconcile it with your accounting system to ensure accuracy.

Keep Receipts

Keeping receipts is important for verifying expenses and reconciling the petty cash fund. Make sure the custodian collects receipts for all transactions and files them according to category. This will also make it easier to provide supporting documentation in the event of an audit.


Managing petty cash entry may seem like a minor detail, but it can have a big impact on your business. By establishing a fund, creating a log, assigning a custodian, implementing controls, and keeping receipts, you can ensure that your petty cash is managed efficiently and accurately.

By following these tips, you can gain better control over your finances and avoid any potential problems that may arise from poor petty cash management.

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