How to Reconcile Petty Cash
Petty cash is generally a small amount of funds that a business owner or manager keep to meet the daily expenditures of a business. The amount of petty cash for a business is strongly dependent on the scope and size of business. Not to mention, the petty cash serves the purpose of meeting day to day operations to ensure the smooth running of a business, but there is a strong need to keep track of petty cash. You must be careful while using the petty cash and keep receipts of all the expenditures.
Instructions
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1
Jot down the beginning balance
In order to keep track of the petty cash and efficiently use your resources, you must jot down the starting balance of the petty cash before using a single penny. With the growing tensions and competitions, it is hard for a person to remember all the expenditures incurred, thus you must note down the starting balance of your petty cash and that way you will be able to reconcile all of it. You should consider keeping all your petty cash in a secured box, so that any chances of theft could be avoided. -
2
Check the box for cash
You must carefully count the cash in the box to ensure that the amount matches with your starting balance and there are no discrepancies. Petty cash does not necessarily mean that there will be large currency notes but you must very carefully check the box for coins and change. After making sure that the amount in box matches with the beginning balance, only then you should start using it. -
3
Keep receipts
It is important that you keep receipts of all your expenditures in the same box. In order to prevent accusations of fraud or theft, you must obtain receipts of all the expenditures that you have incurred. -
4
Count un-cashed cheques
If there are any un-cashed cheques present in the box, you must also count them in the balance to keep track of all the money. -
5
Check balance
At the day end, you must calculate the remaining amount in the box including the un-cashed cheques and add it to the expenditures to ensure that it matches the starting balance. Remember that, all of these amounts should match with the total amount of petty cash. -
6
Check for discrepancies
If the calculated amount does not match the actual amount and there is any discrepancy, you must report it.
