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Taming the Petty Cash Monster
by Toffer Grant, CEO & Founder, PEX Card
Most small businesses have a petty cash fund to pay for small, miscellaneous and occasional expenses such as stamps or supplies for the company lunchroom. But small business owners often underestimate how much petty cash management can get out of control. It is not the same as having extra cash in your pocket it is a key business expense that impacts cash flow and the companys bottom line.
Managing Your Petty Cash Fund
Properly tracking your businesss petty cash requires documentation and organization, from the time an employee first requests funds to the time the purchase is reconciled in the books. And there are a number of steps along the way: documenting the request, providing the funds, gathering the receipts, manually recording each transaction and replenishing the petty cash fund as needed.
Too often, employees hit the petty cash drawer for more significant and recurring operating expenses, like fuel and equipment purchases, rather than using their own credit cards and submitting expense reports. Then there are missteps in the process, like forgetting to maintain receipts, losing cash and not being able to substantiate purchases. A laissez faire petty cash management system can put your company at risk for fraud and employee theft, not to mention the migraine it will cause if the IRS comes knocking.
So what can you do? Try these tips to keep the petty cash monster from eating your time and money:
Toffer Grant is the CEO and founder of the PEX Visa® Prepaid Card Service, a corporate prepaid card solution used to budget and track employee spending. Learn more here.