How to create a petty cash account in Sage Accounting Start.
Description
Many businesses have a petty cash account for everyday purchases or costs, such as office supplies, parking charges and petrol.
Petty cash transactions can often be cash only.
They may also used to be a reimburse employees or to buy items for small amounts.
We recommend that you create a special petty cash bank account to track these payments. This will also help you report and manage how you spend your petty cash.
Rather than being an actual bank account, we will set up a special bank account for cash only.
As this account is for cash only, you can't reconcile the bank account.
Resolution
What you need to do
- Create new a bank account to represent your petty cash balance
- Enter an opening balance to show the current balance of your petty cash
- Record payments for things bought with petty cash
- Record a transfer when you top up your petty cash
- Record a cash deposit when you transfer money from your cash account to another bank account
Create a petty cash account To create a petty cash account:
- From Banking, click New then Bank Account.
- For the Account Type list, choose Cash in Hand.
- Enter an account name, for example, Cash register.
- Click Save.
Enter the opening balance
It's likely that you will already have an amount in your petty cash. You now need to enter this as an opening balance to make sure your balances match up.
- Choose the Add opening balance link from the create your bank account page.
- Enter the date for your opening balance.
- Enter the amount.
- Click Save.
Record petty cash payments Enter details of money spent to keep track of what you've spent and the balance that should be left.
- From Banking, choose the petty cash account.
- Select New Entry then Money Out.
- Enter details of the payment.
- If the payment was for several types of items relating to different ledger accounts, or with different VAT rates, enter these on separate lines.
- Don't forget, the total value of all the separate lines must add up to the total value of the payment.
- Click Save.
Record a transfer of money from another bank account When you need to add to your petty cash, and you take money from another bank account, you need to record this as a bank transfer.
- From Banking, select New and Bank Transfer.
- Enter the details of the transfer:
Paid from Account - the bank money is coming from.
Paid into Bank Account - your petty cash account.
Method - how the money was paid in, cash or debit card, for example.
Date transferred.
Reference.
Description. - Click Save.
Record cash deposits When you pay cash into another bank account from your cash accounts, you need to record this as a Bank Deposit.
- From Banking, open the cash account.
- Select New Entry and Bank Deposit.
- Enter the details of the transfer:
Paying in Reference - this would usually be the reference from your paying in slip
Cash - the amount you are paying in
Bank Account - the bank you paying the money into. - Click Save.
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