Petty cash in quickBooks [detail guide]

 

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Many businesses that use QuickBooks have created Petty Cash in QuickBooks. There are day-to-day expenses that you pay in cash and on an immediate basis. So, for that, you need to maintain a petty cash account. It’s easy for you then to make payment. These payments are not very big, you don’t need to pay them through check or card as they are not recorded in the Balance Sheet. Whether you are maintaining a petty cash account or don’t know how to record petty cash in QuickBooks, then we are here to enlighten you with every piece of information you must know. Let’s start.

Overview of Petty Cash in QuickBooks

Petty Cash in QuickBooks Petty cash is maintained by small and big size companies, to make little payments. So, businesses maintain the account to keep the fund in it. You can create a petty cash account to record the transactions that are made with cash. These transactions can be recorded by the user and it will make your work easy. They are generally your day-to-day expenses like stationery, stamps, postage, etc. If you want to set up this account in QBs Online then you just need to click on the Cash on Hand option. 

Benefits of Petty Cash in QuickBooks

Few are the benefits of maintaining petty cash in QuickBooks:
  • It is like a locker where you can keep your money without any fear.
  • Users might find the feature simpler to utilize, making the supply of money suitable.
  • You can pay tiny expenses from your petty cash account.
  • Users can maintain a record of expenses that they have paid through petty cash.
Read More - How to Clear Undeposited Funds in QuickBooks?

How to Create a Setup in ‘Petty Cash Account’ in QBs?

Here are the steps that you should follow how to set up petty cash in QuickBooks: chart of accounts
  • Go to QuickBooks and choose Lists.
  • Then click on the COA option and tap on Account.
  • Now, Click on Bank and enter the name under the ‘Account Name’ field.
  • After that write down the balance if any, otherwise Zero.
  • Look for the ‘As of’ tab and choose the ‘Date’ for entering the opening balance.
  • Lastly, press Save and hit on Close.

Steps to Record ‘Petty Cash Transactions’ in QBs Online

Follow the instructions to record petty cash transactions in QBs online: Record ‘Petty Cash Transactions’ in QBs Online
  • From the QBs Online window, click on Settings.
  • Tap on Chart of Accounts and press New.
  • Now, move to Account Type and choose Bank.
  • Go to Detail Type and select Cash on Hand.
  • Enter the name under the ‘Account Name’ field and type Petty Cash.
  • Once the money moves from the ‘Checking Account’, you will see an opening balance.
  • Hit on ‘As of Date’ and click on Save & Close.

How to Reconcile Petty Cash in QuickBooks?

Go through the procedure carefully to reconcile petty cash: How to Reconcile Petty Cash in QuickBooks
  1. The process starts by confirming the remaining balance after the financial period ends.
  2. You will review and verify the receipts if they are complete or not.
  3. Closing Balance = Ending balance + Additional cash – Withdrawals.
  4. If any mistake is found then you need to check it. You should check you have enough funds, and look for lost receipts.
  5. Further internal controls are implemented if inconsistency is found.

Conclusion

We have explained all the information about Petty Cash and what is the importance of it in QuickBooks. You can use it to maintain a record of expenses. And, also highlighted the steps of how to record petty cash in QuickBooks and in QBs Online in detail to monitor you in the best way. We will be more than happy if you contact us for any further information. 

Frequently Asked Questions (FAQs)

Q1. – What type of account is petty cash in QuickBooks?

Answer – Petty cash is considered a Current Asset and you need to mention it on the debit side of the balance sheet.

Q2. – Is petty cash an expense in QuickBooks?

Answer – No, it is not an expense but you should place it in the Balance sheet with Cash on Hand or Bank.

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