In all kinds of businesses, employees would have to handle petty cash at one time or another and it would be very useful to record everything in a petty cash log. Basically a petty cash log template can be easily done in any spreadsheet software such as Microsoft Excel wherein you’d create a format with columns to record all the important financial information about petty cash transactions.
A petty cash form can be created in your computer and the columns can be filled out there as well. Otherwise you can print out a couple of these forms and bind them to have a physical log of all your transactions.
Throughout the day, quite a number of petty expenses are done especially for bigger organizations and having a book to record everything in is essential so you don’t lose track of your money and you don’t end up having questions about daily expenditures.
When your organization has an actual book for petty expenses, all your cashier would have to do is list down everything right after every transaction. The amount, date and purpose (for expenses) would have to be listed down so your record will be comprehensive and complete.
Typically this kind of book or log is created for small payments or transactions which involve small amounts so that everything is recorded, no matter how small. Some examples of such small payments are bus, taxi or car fare, stamps and postage, payments for coffee or tea and others.
In all kinds of businesses, it would be very important to have your own petty cash log to monitor and record all your transactions. Especially when dealing with smaller amounts, which could go unnoticed, having a log or a record would allow you to keep track of everything as the small amounts pile up. Here are the important reasons why it would be beneficial to have such a book or log for your petty expenses:
As you can see, having a record of your small transactions is very important as it would make work a lot easier and a lot more convenient. Think about starting this system in your own business then you can start creating your own log which will be used by the persons you will assign on a day to day basis. Before you start making your log, it would be helpful to learn about the different types, which would serve different purposes.
Though you can make your own petty cash log template, learning about the different types can help you out immensely. You may find out that certain types might apply to your business more effectively and so you can format your log the same way. Here are the different types:
This type of log is the most basic and is similar to a single cask log. You’d only have to make a column for the amount and a column for the date. The amount which is received from the head cashier is written down on the debit side of the log and the petty payments made by the cashier are written down on the credit side of the log. Then at the end of the day, you can compute the total funds you have left in your box.
With this type of log, you’d have to create a separate column for each of the headings of expenses in the credit part of your log. The debit part of your log would only include one column, which would be the cash received from the cashier. Remember that only small amounts should be recorded in the log and if you have this type of log, you’d have to specify this to the person you would put in charge of your funds.
This type of log would contain a lot of columns for amounts of money so you can record daily expenses and it should have a debit and credit side. All the particulars such as receipts and expenses are recorded together in a column which you can name “particulars.” Another column would contain dates for debit and credit records.
In the debit side, the amount of money received from the head cashier is recorded. The credit side would contain more columns, as required. Expenses would be recorded in a classified method, arranged according to the chronological dates of the transactions. A total amount can also be added in the credit side to see the whole amount recorded for expenses.
Any cash spent to purchase or payment is written on separate columns, referred to as the ledger column. The difference between the amount of money in the receipts and the total amount of money payments is referred to as the balance, which is always a debit balance.
Similar to a columnar log, this type would also have a lot of columns in the credit sire and just one column in the debit side along with a particular column and a column for the date.
When using this kind of system, the head cashier would provide a fixed amount of cash or funds to the petty cashier in advance to be able to cover any expenditures for a particular period. When the period is over, the petty cashier would have to submit a statement of expenditures incurred to the head cashier. With this system, it would be important to note that the total amount of expenditures should not exceed the amount given by the head cashier.
The head cashier then verifies the statement and pays the total amount based on the receipts of the expenditures to the petty cashier to fill up the amount lost from the fund. Having a log would make things a lot easier for both the cashiers.
Now that you know the different types of logs and systems which you can employ, you can decide which one would be ideal for your business. Before we look into establishing a system in your business, let’s take a look at some tips and tricks for handling petty cash.
To be able to successfully make your petty system work, you’d have to learn a few tricks which would help you out. These tricks can guide you and help you out so you can effectively start using your log book to record all the transactions. Read on and learn new things:
Establish a Reasonable Amount for Your Fund
Think about all your daily expenses and set an amount for your fund. It should be enough to cover all small expenses in your business daily but not too big that the people who work for you might be tempted to steal it. Also make sure that the amount you set won’t require replenishing too frequently so you don’t have to be stuck with a tedious task.
Identify Where the Cash Can Be Used
Since this fund is readily available, your employees may have the tendency to start spending it on things for the office, but not really related to your business. It’s important to identify when the cash is to be used and emphasize that if it’s not for those purposes, the cash must not be utilized. You can stick a list on your cash box so your employees won’t forget and won’t have any reason to spend the money in any other way.
Require Your Employees to Record Everything
Just because the transactions involved in this system are small, your employees might forget to record them or consciously neglect writing them down, especially if the amount is insignificant. However, this may cause problems for you in the long run so stress the importance of recording everything to your employees and make sure they do it. If you need to, do random checks so your employees are kept on their toes and they would record everything in the off chance that you show up and check the log.
Don’t Give All Your Employees Access to the Funds
Petty cash systems aren’t for everyone. Make sure to only involve the people who have been in your business the longest or those whom you really trust. You can assign the task to one or two of your employees to ensure that the log is neat and you know exactly who is accountable when there are any discrepancies.
Never Leave Your Funds Unsupervised
These funds are very liquid, meaning they are very much prone to theft. Even if you have an office full of trusted employees, leaving any kind of cash out in the open may tempt anyone, whether it’s one of your employees or maybe one of your customers. Make sure your box is locked away, only accessible to those who are in charge of it.
Following these tips or at least using them to guide you would definitely help out in establishing your petty cash system and keeping a good log of all the transactions. Now let’s learn to actually establish a good system where you will be able to use your log book. Whether you decide to make a petty cash form or an actual book, the steps would be the same and the outcome would result in how well you manage the whole system.
Now that you have enough information about petty cash log, it’s time to learn how to establish a petty cash system in your business. After you’ve established such a system, you can start creating a petty cash log template which will be handled by your cashier or whoever you’d want to be in charge of it in your business. Take a look at these useful steps:
Again, it’s important to note that you should log all your expenditures and make sure they come with the corresponding receipts. Doing this would ensure that your log is complete and accurate.
Here’s what else you can expect from our legal and business services,
We can help you to:
It’s time to bring your business to another level. Start to optimize and streamline your business today. Get all the professional-grade business templates you need to plan, start, organize, manage, finance, and grow your business; one click away in the below links!
For our ONLINE legal and business services, please follow this instruction:
P.S. Sometimes all that’s needed is a form, document or tip that can solve problems or issues that repeat in your life or business. To save you from unnecessary legal costs by hiring lawyer(s), here are customizable smart templates/forms that you can use as often as you need; flexible enough to allow for changes without leaving you exposed. Click the following link, FREE CUSTOMISABLE LEGAL TEMPLATES to search for the desired template, download it and embark on your great legal adventure – and don’t forget to bring the bug spray. For each template, we have numerous different customizable documents.
Go to the “Order Now” page and make a request.
We look forward to addressing your concerns and earning your trust and confidence in us!
🇰🇪 Kenya’s E-Lawyers and Business Specialists 🇰🇪
Join our mailing list to receive the latest news and updates from our team.