How Do I Keep a Petty Cash Log?
To keep a petty cash log, you will first have to decide whether you want to keep a written log or record transactions on a computer. Then you will have to create or obtain a log that has the appropriate entry columns, such as those for dates, transaction amounts, income or expenditure descriptions, and balances. Once this log is created, you can keep track by simply recording each time you pay for something with petty cash or receive money in this form. Additionally, you may benefit by keeping receipts to back up your log entries.
When you need to keep a petty cash log, it is important to understand that you do have choices when it comes to creating it. You can use a written log, a computer software program specifically designed for recording petty cash transactions, or even just a computer spreadsheet to create your log. If you decide to use a computer option for recording petty cash, however, it is typically critical that you back up your files on a regular basis. If you do not remember to do this, you might have a difficult time figuring out how you spent petty cash and proving your expenditures if your computer system crashes.
Typically, a petty cash log will have a designated area for recording various pieces of data. For example, the log you create should have a column for entering the date on which you paid with cash or received cash as well as a column for designating whether or not you received a receipt to document the transaction. Your log should also include an area for listing the party to whom you paid cash or the person from whom you received money and the amount of the transaction. You will also need an area for describing the transaction. For example, you may note in this area that you paid for supplies or received a donation.
When you are keeping a log for petty cash, you will need to keep track of the balance in your account as well. This means you will need a column in which to record the balance of your petty cash fund after each transaction. Keeping track of the balance is not only good record-keeping, but may also make it easier to notice when it's time to replenish your petty cash fund.
If you are running a business that has employees, you will have to decide who will have access to your petty cash and be responsible for keeping the log. If more than one person will have access, you will need a system for recording who is responsible for which transaction. You can keep a record of this by adding a column to your log for the employee’s name.
In addition to keeping a petty cash log, it is also important to keep any receipts you receive in relation to petty cash. This even includes the receipts for the small amounts you do not consider very important. You might later need these receipts to help prove some of your expenses.
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