Introduction
Petty cash is a small amount of discretionary funds in the form of cash used for expenditures where it is not sensible to make any disbursement by check, due to the inconvenience and costs of writing, signing, and then cashing the check. In Empress, we have a user-friendly feature, Journal Entry, which allows you to effortlessly record these petty cash transactions.
Steps to Record Petty Cash Expenses
Here are the step-by-step instructions to guide you in recording your petty cash expenses:
Step 1: Create Accounts under Chart of Accounts
a) Cash Account
This is your principal account where all cash transactions will be handled.
b) Expense Accounts (under Indirect Expenses)
These are the accounts where you can record different types of expenses.
Note: Most of these accounts will already be created. If needed, you can create additional accounts.
Step 2: Create a Journal Entry (JV) of Type Cash
This is where you’ll record your petty cash transactions.
Step 3: Auto-Populate the Default Cash Account
The default Cash account will automatically appear on the Credit side row. You can modify this account if required.
Step 4: Add the Expense Account
You can add the Expense account in the table. You also have the option to add multiple Expense accounts (such as Telephone Expense, Travel Expense, etc.) as separate rows. Ensure that the Debit and Credit sides are balanced.
Step 5: Add Additional Details
You can further include a Reference number, Date, and Remarks for future reference.
Step 6: Save and Submit
After filling in all the necessary details, you can save and submit your entry.
Following submission, you can directly view the Accounting Ledger from the Journal Entry itself by clicking the View button.
In conclusion, managing petty cash in Empress is a straightforward process. By following these steps, you can ensure that all minor expenses are accurately recorded and easy to reference in the future. This not only helps in maintaining an accurate and up-to-date record of your financial transactions but also contributes to effective cash flow management.