Being fairly new to this game I was hoping for some advice when handling petty cash. In a previous company a tight grip was kept on petty cash. Each spend from the petty cash was posted as an invoice to Sage and then paid off with cash takings each week. The petty cash tin was always reimbursed to exactly match outgoings.
In another company the petty cash tin was just topped up occasionally. On Sage the payment was just a bank payment to a petty cash expense account and no tabs were really kept on the outgoing items.
I'm now using Liberty and would prefer to keep a tighter lid on things. Is there anyone who uses Liberty who can advise?
hi, iwold be grateful if someone could confirm the following At the end of the trading period the petty cash book is topped up to its original figure for example £50 What i would like to know is, Petty cash £50 stated in the trial balance? im sure iread somewhere it is not and cant understand why. Thanks for taking the time to read this post. Robert the student.
The petty cash balance should be on the trial balance, as part of the balance sheet codes, otherwise it wouldn't balance when posting expenses etc. It should appear as a dr balance.
If there are cash expenses you would cr cash, dr the expense. If the petty cash is being topped up, it could be from the bank account, so Dr cash and Cr Bank.
Thanks Gill Sorry I've taken so long to reply to your post had a busy few days I understand petty cash topic much better now . Thanks for your advice Robert
Then each week or month, add up all the payments and draw a cheque for the amount paid out. It should restore the balance back to £100
then
dr expense cr bank
There's no real reason to touch petty cash after day 1, as the sum of the cash plus receipts in the petty cash "tin" should allways equal the balance on day 1.
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Tony
Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
Petty cash can be treated as a bank account: - record payments into the account from the bank (e.g. when a cheque is cashed) as a bank transfer - record other transaction as per any other bank account - mostly general payments - against ther relevent nominal. This account will be in the trial balance as a current asset as per other bank accounts. This also allows you to reconcile the petty cash against receipts or any paper journal (notebook) you might keep.
