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Small business accountant in Melbourne provides you with tips for better petty cash control

Does the word ‘cash’ scare you a little? But the word ‘petty’ reassured you that it is just a small sum of cash? Petty cash is small but it doesn’t mean that you can ignore it.

The main purpose of having petty cash on hand is for employees to use for tiny expenses such as office supplies, stamps or groceries. Having cash “reachable” to a less than honest staff is like having a piece of meat hanging on the top of a tiger’s cage.

Usually the story of theft begins when a staff borrows cash to buy lunch and do not pay back due to the realisation of a lack in tracking the cashflow. Then, it seems like an “open invite” without a proper tracking procedure in place.

In order to have a better control of your petty cash, give the authority to one trusted staff to handle and manage these cash on hand. Make sure the trusted staff records the purposes of use and make sure employees request disbursement with a receipt. It is important to tally the receipts and the total amount petty cash at opening balance. Apart from that, have a manager to sign off the records that the staff has made before making new petty cash deposit.

How much petty cash does your small business need? It depends on your company size, number of staff and how petty cash is being used in your business. The best way to determine the right amount is by averaging the previous months petty cash expenses for an accurate gauge.

Don’t forget to establish a “perimeter” of what can be used for petty cash and what can’t be.

If you are looking for someone to help, contact mas soon! Based in Sydney and Melbourne, we are a group of professional accountants who are passionate in taking off the accounting burden off our clients.

 
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