Petty Cash is Old-School - Here's a Modern Solution - Brink's Money
Petty Cash is Old-School - Here's a Modern Solution
11 Mar 2020
As accountants will know, running a business is anything but straightforward when it comes to tracking incoming and outgoing payments. Between operating costs, last-minute purchases for events, on-the-road expenses employees rack up and more, it can be an overwhelming task to keep everything tracked and visible each month.
This is especially true when it comes to how a business manages their petty cash. A lot of times it turns into a wild goose hunt, looking for the last couple of dollars and cents that haven’t been reported or claimed, but somehow aren’t in the till.
Unsurprisingly, as technology has improved, so has the software created to help streamline accounting tasks. When you work with a partner for all aspects of your accounting needs, like Brink’s Business Expense, you’ll find little efficiencies that contribute to improving your bottom line. In this case, we’re talking about managing petty cash so the goose hunt is over, once and for all.
What is petty cash?
Petty cash is the small amount of cash that a business keeps on hand. It can also be referred to as “cash on hand” and the phrase “petty” here doesn’t mean insignificant but rather “small.” Employers tend to keep cash on hand for one of three reasons: 1) to help quickly reimburse employees for any business-related items they bought, 2) to make physical change for customers during a sale, and 3) to cover small purchases like office lunches or parking fees. But, as the cash economy has shrunk in favor of debit and credit cards, the use of petty cash has also been diminished. The need to have access to cash for small purchases is still essential for every business, especially with the capability to mark those purchases as expenses.
How a petty cash system works
The initial money in the system will usually come from the business’s checking account. Then, everytime someone (owner or employee) spends money from this account, it is recorded along with an amount, date, who was paid (the vendor), and the purpose of the purchase. Consistency is key with this reporting--it must be documented the same as income and expenses.
Nowadays, you can rely on software to help automate this process and ensure every purchase is tagged appropriately and accounted for.
Put Brink’s Business Expense to work for you
When you choose to work with Brink’s Business Expense for your accounting needs, you’ll feel the difference. Tasks that used to be menial become a breeze. This includes the need for handling and managing small expenses, only this time there is no need to use petty cash anymore. When you open a Business Expense account for your business, you have all of our resources at your disposal to create the unique-to-you solution for bringing your business up to speed.
It used to be the way of the world that petty cash accounts had a log and slips to help keep that information all in one place. When the amount in the account gets too low, there’s a check written out to Petty Cash to replenish the funds and the whole process starts over again. Now, you can set up automatic transfers with your business bank accounts to ensure the expense cards always have funds that are accessible when they’re needed the most.
Whether it's lunches for client meetings, supplies for an event, or parking fees as they visit different clients, chances are every user who has access to a business expense (virtual or physical) card will have some level of routine to their spending. Now, when you set up your account, you can create custom alerts for when suspicious account activity is spotted. Stop the errant spending in its tracks that would otherwise go unnoticed with a traditional petty cash system.
Don’t worry about out of pocket expenses anymore! With the combination of physical cards that managers control with a flip of a digital switch and virtual cards that are secure and available in an instant, you and your employees will always be ready and able to cover last-minute purchases.
Programs like Brink’s Business Expense are designed for organizations of all sizes, so they can automate most of your bookkeeping processes, including the vast majority of your petty cash accounting. Call our team today to find out how you can start your 60-day free trial.
More from our insights library:
How to Achieve Financial Independence
Want to work toward becoming financially independent? Follow our five simple steps to help you plan for and achieve financial freedom.
Keys to Expense Management for Construction Companies
Every industry likes to claim that it faces unique challenges. Construction companies have the data to back it up.
5 Key Expense Management Best Practices
Keeping track of and managing your expenses can have great benefits, including maximizing your revenue and knowing exactly where your money is going. Here are five key best practices to keep in mind when increasing the success of your expense management system.