Petty cash voucher definition

To reimburse expenses, require a receipt from the employee and then provide them with the exact amount of cash and coins from the lockbox. Then, place the receipt in the lockbox and record the expense in the petty cash log by entering the date, payee, description, reference number, and amount. In the general accounting practice, petty cash vouchers are used to verify whether the amount of money in the petty cash tin is correct. A petty cash software simplifies petty cash management by automating the process and providing an efficient way to track and manage expenditures. It helps streamline the process of recording, tracking, and reconciling each transaction.

Our tutorial on setting up a petty cash float gives full details of the journals needed to establish a petty cash float for use with this petty cash voucher template. All petty cash transactions need to be supported by a petty cash voucher. Every Petty Cash Voucher must be supported with additional documents that justify the disbursement – receipts, checks, tickets, etc. In this case, the surplus petty cash should be taken from the fund and deposited in the company bank account. When the check is cashed, the funds will be added to petty cash so that its original level is restored. A petty cash fund is a small amount of cash on hand, usually less than $500, used to cover incidentals or petty expenses.

• Proper tracking and reconciliation is essential to managing the petty cash balance.
• Every Petty Cash Voucher must be supported with additional documents that justify the disbursement – receipts, checks, tickets, etc.
• At the end of the month, John will use the filled petty cash vouchers to determine how much cash has been spent from the petty cash fund and how much needs to be replenished.
• They ensure petty cash is used for legitimate business expenses, not personal expenditures.
• Since it can be easy to ‘leak’ money through petty cash, most companies set rules around access and acceptable spending reasons.

Free Petty Cash Voucher Templates

When the fund requires more cash or at the end of an accounting period, the petty cash custodian requests a check for the difference between the cash on hand and the total assigned to the fund. The petty cash voucher is an important form of evidence for reconciling the remaining cash in the petty cash box. Then, as cash is disbursed from the petty cash box, the vouchers are essentially swapped for cash. A petty cash voucher petty cash software also helps create expense reports and track receipts. It ensures all transactions are accounted for, and all necessary documents and receipts are kept for audit purposes.

Guidelines to create Cash Payment Receipt:

They’ll be in charge of handling and disbursing petty cash and ensuring that the petty cash fund is used for its intended purpose. They’re also responsible for the safekeeping of the physical cash and possess the key to the lockbox where the cash and receipts are kept. However, the availability of petty cash doesn’t mean that it can be accessed for any purpose by any person.

Balance Sheet

All of our templates are completely free to use and are designed to save you time and hassle. Whether you’re a student, a recent graduate, or a seasoned professional, we’ve got you covered. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation.

Double Entry Bookkeeping

For example, if you have decided on a petty cash fund for $100, your petty cash account book entry will show a debit of $100 to your petty cash fund and a credit of $100 to your bank account. The ending balance is the difference between the beginning balance and the total petty cash expenses. Many bookkeepers prefer to combine the second and third journal entries above if the cash is replenished at the same time as expenses are recorded, which is generally the best practice. By combining the journal entries, Petty Cash isn’t adjusted and the expenses are recorded coming directly from the checking account. Each time you tap into a petty cash fund—that is, take money out—a slip or voucher should be filled out. Like any other type of transaction, you must record petty cash transactions in your small business accounting books.

She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications. Here is an outline of the Cash Voucher and what kind of information it should represent.

Your petty cash records might be inaccurate due to employee theft or accounting errors. Petty cash funds typically depend on how frequently your business makes small purchases. Finally, surprise petty cash counts should be made to maintain good internal control over the fund.

• The individual responsible for approving vouchers must be familiar with the organization’s petty cash policies and procedures to replenish new funds.
• In the example below, a petty cash slip was completed to record a $6.99 expense for lightbulbs.
• Since most petty cash purchases are for business expenses, you will likely be able to deduct them from your business’s taxes at year-end.
• As the petty cash total declines, the receipts should increase and tie out to the total amount withdrawn.
• Companies normally use checks to pay their obligations because checks provide a record of each payment.

Sample Medical Forms

In the same scenario, if the item or product is under warranty, the vendor will ask the client to present a cash receipt form for claiming warranty service or repair. For uncommon expenses that don’t happen routinely, departments and divisions inside an organization have the facility to ask the finance department to issue some cash for general use. This cash can be used to buy office stationery, pay for travel expenses, or just pay for pizza when the office staff is staying late for work.

Receipts or other documentation justifying the disbursement should be attached to the petty cash voucher. Since most petty cash purchases are for business expenses, you will likely be able to deduct them from your business’s taxes at year-end. The balance in the petty cash account is now $300, which is where it was originally authorized to be. For example, if there are un-reimbursed expenditures from petty cash at the end of the year, expenses are understated and cash overstated.

When the cash balance in the petty cash fund drops to a sufficiently minimal level, the petty cash custodian applies for more cash from the cashier. The journal entry on the balance sheet should list a debit to the business bank account and a credit to the petty cash account. When petty cash is used for business expenses, the appropriate expense account — such as office supplies or employee reimbursement — should be expensed. The total of the receipts and the remaining cash should always equal the amount you started with. For example, if you have a $100 petty cash fund and spend $27.52 on office supplies, your receipt for the purchase plus the remaining money in the fund will add up to $100. Managing your petty cash funds begins as soon as the first check has been cashed to create the petty cash float.