Petty cash book – download a template you can start using today
Monitoring petty cash spend can quickly become an accounting nightmare. Keeping track of who’s taking money, how much, and for what purpose is a constant challenge. Enter the petty cash book: a record of all your petty cash transactions.
In this post, you’ll find out how to create and maintain a log of miscellaneous expenses using a spreadsheet. You can download the simple petty cash ledger we created and adapt it for your own use to get started. Find out how to stay on top of petty cash and keep everyone accountable with less admin and zero paperwork. You can make your petty cash management even more efficient by joining thousands of other businesses already using Soldo. Find out how.
What is a petty cash book?
A petty cash book is ledger used to track small and petty expenses incurred by businesses during day to day operations. For example, small expenses incurred by employees such as tea for the office, ink for the printer, stamps from the post office etc, would all be recorded in the book.
Why do you need a petty cash book?
There are three compelling reasons to keep a petty cash book:
- It helps you keep track of every transaction your staff makes
- It keeps everyone accountable, because there’s a written record. This is especially helpful now that more people are working remotely, which means they’re harder to supervise
- You’ll have more visibility. An accurate ledger breaks down your petty cash spend, so you’ll know exactly how much you’ve spent on staples, paper, ink, toner, and other items
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 format a petty cash book?
Your petty cash book can be as basic — or as detailed — as you want it to be. Most people have a simple question, what do you actually include as headers in your template? The answer to that depends on what type of petty cash log you want to use.
Different types of petty cash book:
At this point, we should note that a petty cash book or ledger is different to a voucher. A voucher is essentially a receipt or form that you issue every time a payment is made out of the petty cash fund. You can download and print our simple template for a petty cash voucher here.
Now, let’s have a more in-depth look at each type of petty cash book.
Simple petty cash log
As the name suggests, this is fairly basic. A simple petty cash book 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.
Analytical petty cash ledger
An analytical petty cash book 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.
Columnar petty cash log
You won’t be surprised to hear that this type of petty cash book has lots of columns. This allows you to record:
- Daily credits
- Daily debits
- Transaction particulars
- The date of each transaction
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.
Imprest petty cash ledger
An imprest petty cash book 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 manage petty cash
So you’ve downloaded our petty cash template or created your own. But how do you actually manage your petty cash box?
Here are three tips to get you started.
1. Decide how much money to keep in the petty cash box
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.
2. Assign a petty cashier
It’s usually best if you leave the petty cash book (and 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.
3. Keep your petty cash box secure
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.
4. Try an alternative to the petty cash book – what if you could ditch the spreadsheet altogether?
As it happens, there’s an alternative to fiddling around with notes and coins, petty cash book 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. Learn more about using Soldo to manage petty cash or get started using Soldo today.