Petty cash fund is the small amount of cash that is used to pay for your low-cost expenses in business such as postage stamps. If you are planning to post the petty cash in QuickBooks, it requires you to create a petty cash account system. In case you have no idea how to create a petty cash account in QuickBooks, we will guide you. In addition, you will learn how to post petty cash in QuickBooks Online and Desktop. Let’s get straight into the guide.
By reading this guide, you will learn the procedure of creating a petty cash account, recording petty cash to manage the expenses in QuickBooks Online and Desktop.
- How to Post Petty Cash Expenses in QuickBooks Online?
- Step 1: How to Create Petty Cash Account in QuickBooks?
- Step 2: How to Post Petty Cash in QuickBooks?
- How to Post Petty Cash in QuickBooks Desktop?
How to Post Petty Cash Expenses in QuickBooks Online?
To pay small expenses, petty cash plays a vital role in supplying the cash. However, you will have to set up the petty cash accounting system in QuickBooks. Once you do so, you can manage or track the petty cash. In the following discussion, we will provide two simple steps where you will learn to create and manage the petty cash in QuickBooks Online.
Step 1: How to Create Petty Cash Account in QuickBooks?
Before adding the cash to petty cash, having a petty cash account is compulsory. Hence, in the first step, we will show you easy steps to set up the petty cash account.
All you have to do is go to the Chart of Account menu, add a new bank by selecting the Account Type and Detail Type. After giving the name to your account and adding the balance, you can save the details. Pursue the following steps to understand in detail:
- In “QuickBooks Online”, navigate to the “Settings” menu.
- Then, click on the “Chart of Accounts” option.
- Press the “New” button to add a new account.
- Now, select your “Bank” using the “Account Type” drop-down option.
- Then, use the “Detail Type” drop-down option and select the “Cash on hand” option.
- Type “Petty Cash” for the name of your account.
- Here, you will see the opening balance is created when you send money from your checking account by transferring funds or writing a check. Those who have money already to use for petty cash can add the amount in the field of “Balance”. Also, select the “As of date”.
- Once done, click on the “Save and Close” button.
Now that you have created the petty cash account, the cash can be put into the account. To know more, read the next step.
Step 2: How to Post Petty Cash in QuickBooks?
Users can put the cash into the petty cash account. And, the cash can be taken out when required. It is suggested to designate at least one person to manage all the petty cash boxes and keep tracking the withdrawal. To put the cash in and take the cash out, continue reading the following details:
Add Cash to Petty Cash Account
First of all, you need to withdraw cash from the current account and then put the cash in a locked cash box. Then, start recording your transaction in your QuickBooks Online account in any of the following ways:
- If you have written a cheque for cash then go through the following steps:.
- Click on the “New” button.
- Then, click on the “Cheque” button.
- Now, click on the “Petty Cash” and select it as a payee. If the petty cash is not listed in the payee’s list then click on the “+Add New” button.
- If the cash has been taken out without writing a check, then do the following:
- Click on the “+New” button.
- Then, select the “Transfer” option.
Take the Cash Out from the Petty Cash Account
When you use the petty cash or give cash to the employee, you should record it on paper to track why this money is used for and for whom. This way you can track the petty cash that you are taking out.
- In QuickBooks, users should enter taking cash from the petty cash account as an “Expense” along with the petty cash as a payment method.
- Also, the amount you left and the amount on the paper should be added up to the amount you have deposited in a box.
It is also suggested to reconcile the petty cash account on a regular basis. By doing so, you can move the paper slips to the long-term record because your transactions are available in QuickBooks.
How to Post Petty Cash in QuickBooks Desktop?
QuickBooks Desktop users can also post petty cash to their accounts. All you are required to do is go to the Chart of Accounts, click on the Petty Cash Financial Balance option, open the transactions, add the payee name, cash amount, and save other required details. To know the detailed steps, you can go through the following steps:
- Go to the “Chart of Accounts” option.
- Then, click on the “Petty Cash Financial Balance” option.
- Here, you need to open the new transaction in your record register. Then, record the amount.
- After that, enter the name of the “Payee”.
- Now, you can add the checked amount of the payee cash that has been spent in the “Payment” section.
- After this, choose the business ledger using the “Account” drop-down menu.
- Now, record the cost for each record and save the details.
By using these steps carefully, you can easily post petty cash on QuickBooks Desktop. Make sure you select the relevant payee name and the cash amount.
Benefits of Using Petty Cash in QuickBooks
Petty cash accounting system can be set up to add or withdraw the cash for low-cost business expenses. If you are wondering what all benefits are there to use petty cash, check out the following details:
- Bank Type Account: In QuickBooks, petty cash is the cash on hand that is used in the wallet of an owner.
- Secured Box: Keeping the money in your wallet can be risky for petty expenses. But, a secured box keeps it safe and minimizes the risk of keeping the cash in hand.
- Manage Account Cash Sheet: All the expenses and transaction records are represented in the balance sheet.
- Keep Spending with the Details: Users can save receipts for all the expenses to keep the petty cash details in a manner.
- Long Term Transaction Record: You can reconcile the petty cash in your QB petty account on a regular basis. By doing so, you don’t have to keep tons of records on paper. Hence, petty cash is the best way to keep the record for the long term.
- Easy to Use: Besides its helpful feature, the procedure of using the Petty cash is easy and convenient. With this petty cash service, you can pay small expenses easily.
- Keep the Record Payment Expense Transaction: By using petty cash in QuickBooks, you can easily keep all the payment transactions from your fund as a transaction.
Petty cash serves you a number of advantages. By using this service, you can track all the account data and expenses.
To Wrap Up
Petty Cash can be a helpful way to manage your business expenses at its ease. All you have to do is set up the petty cash accounting system. After that, you can add the cash to the account. Here, how to post petty cash expenses in QuickBooks Desktop and Online. If required, you can withdraw the cash as well from the petty cash. It works as a safe wallet in your hand.
Do you want more such guides on QuickBooks? Have a look at the provided guides you may like:
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