Good question I’ll give it a detailed answer as we get asked that a bit.
What You’ll Master
- What is Petty Cash?
- What do I need to track?
- What Is Petty Cash?
What Is Petty Cash?
Petty cash is used to pay for small bills or expenses that the company, employee or sole trader has incurred. From an accounting point of view it is managed the exact same way as a bill or expenses, actually bills and expenses are the same too. Bill’s just tends to be a term used for items directly paid for by the company and expenses for items paid for by an employee which is later reimbursed by the company.
What Do I Need To Track?
The receipt for the purchase (no matter how big or small). If you have a Vat receipt you can claim back the Vat, if not you can’t (you can’t assume what rate of vat has been charged).
How do I manage Petty Cash in Bullet’s Online Accounting?
I’ve created a simple animated gif to show you how to manage Petty Cash in Bullet it’s super simple.
Follow these 3 steps and you’ll have it nailed.
1 Create Account: In Bullet Create a new bank account (not a real account) called Petty Cash, the idea of this is so it won’t mess up your Current Account bank reconciliation.
2 Put Money Into Account: In Bullet do bank transfer of say €300 from your Company Current Bank Account into your Petty Cash Bank Account.
3) Add Bills: Every time you pay for an item with Petty Cash, just follow the normal Bill process, selected already paid for, and pick Petty Cash Bank Account.