Some business purchases like postage, staff birthday celebrations, office supplies are impractical to pay by credit card or cheque. Petty cash is a small amount of cash kept on hand to cover expenses that are too small to bother writing a check.
In order to maintain the record of the petty cash spends, a petty cash voucher book or cash receipt is typically filled out with information on each transaction and is manually entered into the company’s accounting system and included in the company’s financial statement information.
But don’t you think that these are prone to human errors?
The most common issues that are being faced by companies in petty cash management are:
- Accounting Errors – Petty cash system is susceptible to accounting errors because of the absence of secondary documentation for tracking the cash. Frequently losing a stack of cash vouchers may lead to an accounting discrepancy at the end of the month.
- Disbursing funds to spend – It’s cumbersome for branch staff to travel back and forth to the headquarters of the company in order to collect cash that needs to be spent for all branch related expenses. Also transferring the petty cash amount to branch staffs bank account is a wrong practice.
- Theft – Petty cash account becomes vulnerable to theft by employees, and it’s hard for you to know who took the cash. Accessing the petty cash account by multiple people in the organization may lead to misappropriation of funds or thefts.
- Overspending – Failing to set-up the expenditure limits for every transaction involving petty cash, puts the organization at risk of overspending on purchases. It also necessitates a large petty cash fund, which increases the risk of theft.
How Does Petty Cash Management Software Work?
Petty cash management software provides an automated and controlled means for managing petty cash accounts and reduces the risk associated with these funds. It also provides a centralized repository for storing all documentation associated with petty cash accounts and allows for an easy audit of these records by internal auditors. Usage of petty cash management cards.
Some of the major advantages of using petty cash management cards are:
- Real-time Visibility – Automate disbursement of cash to the outlet when it runs out of balance and monitor outlet wise expenses.
- Book Closure – Close books on 30th of every month. Automate disbursement of cash to the outlet when it runs out of balance and monitor outlet wise expenses.
- Ensure 0% cash leakage – Reduce Fraud, Minimize the potential for mistakes by configuring rules to automate the approval and rejection of Expenses.
- Cash reconciliation software – Get excel reports with data you need. Instant settlement along with error-free & hassle free reconciliation & reporting.
- Instant Disbursement of Funds: Distribute money to employees without bank account using Finly Expense Cards instantly through Finly Dashboard or Finly Mobile.
- Complete Control: Exercise complete control of fund distribution and track expense real-time using budgeting & policy engine.
How Can Finly Help You In Managing Your Petty Cash?
Setup budgets across various cost centers, branches, projects etc. Users can spend using Finly Visa Cards for ATM withdrawals, Online and POS spend. Cash expenses can be tracked on the Finly System against pre-allocated budgets.
Finance team can disburse funds on the cards and set spending limits for each staff to keep expenses in check using Finly’s dashboard. Load or withdraw funds, view business transaction summary, approve expense reports all from your dashboard.
Reports can be generated on the fly and shared with the concerned teams & integrated with other business systems.