In this post, we’ll explain how to create and maintain one and give you a free petty cash template you can use to get started. We’ll then reveal how you can stay on top of petty cash and keep everyone accountable with less admin and zero paperwork.
Why do you need a petty cash template?
There are three compelling reasons to keep a petty cash log:
The upshot is that you’ll have more control over how your staff make use of petty cash. And if you find that people are playing fast and loose with the petty cash box, you can put a stop to it before things spiral out of control.
How do you keep a petty cash log?
Your petty cash log can be as basic — or as detailed — as you want it to be. There are four main types of log:
In the meantime, let’s have a more in-depth look at each type of log.
As the name suggests, this is fairly basic. It has two columns for the amount — depending on whether it’s money in or money out — and a column for the transaction date.
You record withdrawals in the ‘money out’ column and deposits in the ‘money in’ column. At the end of each month, it’s a good idea to carry out a petty cash reconciliation to make sure the amount in the box matches the amount on the log.
An analytical petty cash log is divided into two main sections: credit and debit.
The debit section is a single column where you list withdrawals. The credit section is split into several columns — one for each type of expense.
The benefit of an analytical petty cash log is that it explains each transaction. Again, it’s a good idea to carry out petty cash reconciliation at the end of each month to make sure everything adds up.
You won’t be surprised to hear that this type of petty cash log has lots of columns. This allows you to record:
You record expenses chronologically. You can also log the difference between the cost of a purchase and the amount of petty cash someone has withdrawn in a column called the ledger.
An imprest petty cash log allows you to keep your petty cash at a fixed level. So, for example, you could decide you’ll have £1,000 in your petty cash box.
At the end of an agreed period, for example every month, staff submits a statement of expenses plus receipts. You carry out a petty cash reconciliation to confirm the amounts and top up the petty cash box so it’s back at £1,000.
How to handle petty cash
So you’ve downloaded our petty cash template or created your own. But how do you actually handle your petty cash box?
Here are three tips to get you started.
This will depend on the nature and size of your business.
You’ll want the amount to be enough to tide your staff over for at least a month. Petty cash reconciliation and topping up takes time, so you’ll want to avoid doing it too often.
At the same time, if the amount is too large, staff may be tempted to spend more than they have to.
It’s usually best if you leave the petty cash box in the hands of someone you trust. This person can act as gatekeeper and make sure the log is up-to-date and accurate.
It’s also worth having someone as a backup. That way, things will keep moving should the person in charge be away or move on.
The problem with physical cash is that it’s eye-catching and can be easily ‘misplaced’. It doesn’t have to be a staff member who gives in to temptation, either. A customer or a light-handed delivery person could pocket a few quid from an open petty cash box right under your nose.
With this in mind, you’ll want to keep it in a locked cupboard or drawer. And make sure the person in charge of the box keeps the key safe.
Try alternative to petty cash – what if you could ditch the box altogether?
As it happens, there’s an alternative to fiddling around with notes and coins, petty cash templates, and reconciliations. Substitute it with one — or several — Soldo prepaid cards.
You can load a Soldo card with as much or as little cash as you want, just as you would with a petty cash box. The difference is that you can set up an automatic top up. And, because there’s no physical cash involved, it’s safer, more practical, and healthier too.
Best of all, transactions are logged automatically and you can restrict what your staff can or cannot buy. That means you know exactly what’s being spent in real time, and you’re in complete control without constantly acting like the spending police.
So there you have it. The lowdown on how to manage your petty cash and keep an accurate petty cash log, plus a free petty cash template to get you started.
Want to ditch the box and make petty cash management a breeze?