A petty cash book is an accounting ledger may contain transactions of small amount of money for regular expenditures on small items. Most of the companies are using this accounting tool to kept the sufficient amount of money at office to buying small things that are require. Simply can say “Pocket Money” for office’s minor expenses.
Actually, this is summarization of cash expenditures maintain on date wise records with specific accounting method. Normally, this book is maintaining with handwriting whenever cash amount use for any expense from petty cash stock.
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Overview to petty cash book
Actually, most of the businesses are using this cash book to reducing the burden of the main cash ledger. Normally, petty cash book is able to handle minor cash transactions for small items purchase. Hence, it is works as sub-cash accounting ledger to reducing chaos of cash system.
Simply the petty cash works as:
- Main cash ledger transfers the fund to petty cash ledger at starting of the month.
- Petty cash use the fund for regular minor expenditures, and maintains records.
- At the end of the month petty cash ledger’s amount will be balance the ledger in main cash ledger.
There is simple different between main cash and petty cash is petty cash use for petty expenses with separate records, hence main cash is general for all the cash related transactions. Even, petty cash is sub-ledger of the main cash ledger.
Practically, this is very important to handling both the books as essential needs. Yah! is true that main cash book somewhat more important than petty cash book. But for large scale business is not convenient way to maintain hundred and thousands of small transactions with main cash book. Hence, petty cash will be kept those transactions with sub-ledger.
Types of Petty cash book
Actually, the petty cash book is maintaining each records in chronological order of dates. It will be helpful if you understand the various types of petty cash book. Generally, simple or open type of petty cash book is widely used in businesses. But some other types will be more useful, and give an advantage to maintain & track the records. So, here are the different types:
Basic / Simple petty cash book
Naturally, every accounting ledger contains two sides, that may be credit and debit. This is an initial accounting system may contain two side method. Basically, petty cash book is also containing the two sides, a credit side (expenses and cash payments) and a debit site (cash receipts). As if we see structural view of the petty cash, it can include (1) Date (2) Description of expenses / particulars (3) Amount (Credit or Debit Amount (4) Types (Type of Expense or type of credit).
Generally, when head cashier gives an amount for petty cash, head cashier will be write down this amount in “main Cash” at credit side. Same entry will be entering by petty cash operator – Received cash will be debit in petty cash book.
Analytical formation of petty cash book
This is one of the important kind of petty cash book is usually focus on expenses and its analysis on regular spends. The analytical petty cash book contains the separate column for each expenditure at the payment side. Even at the debit side, there is only single column will be representing the inward of cash. In this format you have to simply describe each expense and its account head to balance the ledger. See picture as below:
As you can see above example, all the expenses are separately managing with the petty cash book. All the expenses are put at payment side ruling into suitable column for organize each expense. Actually there is no any bar or limitation for the setup the expenses at the column. Normally, when business feel to analyze the expenses or for selected expenses are recording separately to identify these regular expenses.
Columnar petty cash book
This type of cash book may contain many columns for amounts to maintain regular records of each daily expenses. This format can include a debit and credit side. The Columnar petty cash book simply include date, and voucher number as usually with any cash book. But here the particular may contains the separate information which describe the accounting head of each expense. This information is very important for accounting purpose. Later on, accountant will be record the amount and enter these amount for maintain expenses records. See example:
All the cash receiving from the main cash can mention at in debit side of the petty cash book. Generally, payment side you can include more columns as per requirement of analysis. As you can see in above picture, all the expenses are organizing separately to describe each expense.
Imprest petty cash book
Actually this is similar structure & contents to a columnar petty cash book. Typically, it may also contain the so many expense columns in the credit side of the cash book to record expenses. But the imprest petty cash book having a maintain their petty cash each month opening fund impresetly.
- On 1st May, 2016 – Main Cashier Pays $1000 to the Petty Cashier for regular expenses as advance amount.
- Petty Cashier Using this fund for various expenses during the May’s month for $800.
- At the end of the month Petty cash cashier will be submit the data to main cashier for balancing the cash ledger.
- At the end of the month Main cashier pays $800 as actual expenses occur during the May month.
- Hence, petty cash will be stay maintain $1000 at the opening of the month at on Jun 2016 with $1000.
In short, imprest petty cash book is design to meet day-to-day expenditures. The system is works on very simple method.
Petty cash book formats & templates
As you know, petty cash is accounting book usually contains the expenses which are small and little value. When you are thinking to make petty cash book for your business. You can check here ready made petty cash book formats, it may helpful for your accounting purposes. Creating a petty cash from beginning can be burden and waste of time. Take these templates as reference will be highly helpful to creates your own one. Here as below some of the ready made formats and templates are given for your reference:
Free Petty Cash Fund Accounting template
This is simple and unique type of petty cash book format using excel template with pre-defined formulas. The template can help to record routine cash transactions which are in minor values. Making a simple and state format may easier for maintain each expense with chronological order. The format targets the debit side of the petty cash usually contain cash inward such as through cash, or checks.
Normally, large and medium scale businesses are using petty cash book for the maintain small or little value transactions related to cash. It may help to reduce the burden of main cash book. The purpose of use of petty cash can be maintaining regular office supplies purchases, and miscellaneous expenses.
Petty Cash Book Format
With this petty cash book template, you can easily track each expenses and analyze for reduce significantly. This is simple but very important template may contain all the require functions which are require for maintain petty cash records. This petty cash book template designed for the any kind of cash transactions. The template may help to identify actually where your money goes to. Through the outcomes from the template analysis, you can identify and help to reduce the expenses.
Normally, petty cash can help to estimate and makes easier to next month plan for potential expenses on review the previous petty cash records. Hence, the main cashier can allocate the sufficient amount to petty cash for meet the regular expenses.
Printable Petty Cash slip for excel
Petty cash slip is one of the important document and part of the petty cash system. This document may contain the individual expense details, and works as receipt of the cash payment made for particular expense. As you know, the petty cash is normally using for the meet daily expenses of the office. When any expense made through petty cash, the petty cash slip is use as receipt of the payment made for any expense. Normally, there are two copies are made with single transaction, one copy will be providing to receiver and second copy use for the entry for cash transactions in petty cash book.
Petty Cash book template – excel sheet
Actually the creating a petty cash template is easier for any accountant. But there are require time to set up all the fields require for the petty cash. Even all the calculations for each expenses, total and other calculations can be time consuming job. Hence, the best option is to ready made template with excel application. Here you can see ready made template with all the require fields, auto calculation of each expenses. Even it may easier to tracking and filter each expenses for particular time. In short, using the excel application may reduce the time and money for cash transaction.
Simple Petty Cash Book Format
This is simple petty cash book format can use for the maintain daily expense records. This format may contain date, cash amount, check amount, check number, description, payee name, amount deposit, amount balance, cash amount.
Importance of Petty cash book
- Obviously, the initial use of the petty cash book is to separating small expenditures from large expenses.
- It will be help to maintain each expenditure records with systematic approach. each payment, date and its descriptions are easier to maintain in petty cash book.
- Simply it is not possible to maintain so many small expenses in main cash book. Hence, the petty cash use to maintain minor expenses require for various purposes. Obviously, it may reduce the burden of main cash system.
- If the main cash handles all the expenses records, it will be not easier to track each expenses. Hence, petty cash may help to focus on each minor expenses to easier for analysis and reduce it significantly if possible.
- Maintaining petty cash is not big task. Hence, new hire can also maintain with sufficient knowledge of transactions. Special skills are not requiring for effective managing it.
- Easier for control over the petty expenses more effectively.
There are so many benefits that makes a petty cash book more important for businesses. When businesses expecting day to day records, accurate updates, expecting control over the minor expenses, and want to effectively organize their small expenditures, petty cash book is best option.