Voucher: The Power of Vouchers in Petty Cash Management

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. At Pluto Card, our mission is to assist businesses of all scales make well-informed choices. To uphold our standards, we follow editorial guidelines to guarantee that our content consistently aligns with our high-quality benchmarks. Even if you’re purchasing coffee in bulk, this will still amount to hundreds of dollars. If your office opts for single-serve coffee pods, you’re likely spending thousands of dollars—just on coffee.

How to use a petty cash voucher?

At this time, the total of all of the receipts is calculated to ensure that it matches the disbursed funds from the petty cash drawer. If new funds are needed, the cashier writes a new check to fund the petty cash drawer and takes, in exchange, the receipts from the purchases that depleted the cash. Companies assign responsibility for the petty cash fund to a person called the petty cash custodian or petty cashier. To establish a petty cash fund, someone must write a check to the petty cash custodian, who cashes the check and keeps the money in a locked file or cash box.

It helps streamline the process of recording, tracking, and reconciling each transaction. If the request is approved, the person should sign the voucher and deduct the amount from the petty cash fund. The person responsible for the fund should also keep a record of all the vouchers issued for accounting purposes. Petty cash typically covers small, incidental expenses such as office supplies, what is the purpose of using a voucher system with the petty cash fund minor repairs, or refreshments for meetings.

For companies managing petty cash manually (like through Excel sheets or manual logs), petty cash vouchers document and track every cash disbursement. By giving this responsibility to one custodian, it means that you will retain internal control over the money. The intent of this activity is to see if there have been any undocumented disbursements. There may be several petty cash locations in a larger business, probably one per building or even one per department. The custodian staples any source documents (usually a receipt) to the petty cash voucher (some petty cash vouchers are printed on envelopes to hold the receipts).

How to Fill out a Petty Cash Voucher?

In this case, the discrepancy should be investigated to identify the reason for the $10 difference. You can ensure your organization is not overspending on items that may not be necessary. The use of these vouchers is relatively straightforward, and the information can be used to help the company manage its budget and finances more effectively. Petty cash, therefore, refers to a small sum of money set aside for minor expenses. This concept dates back centuries, with references found in historical texts such as Benjamin Billingsley’s 1678 work, Advice to the Women and Maidens of London.

Is a petty cash voucher the same as a petty cash receipt?

These vouchers should include details such as the date, amount, purpose of the expense, and signatures of the employee and manager. This system provides a clear audit trail and helps prevent unauthorized use of funds. Regular reconciliation of petty cash transactions with the balance sheet is vital for accuracy. This means ensuring that the total petty cash fund, including cash and documented expense vouchers, matches the petty cash amount recorded. Whenever money is taken out of the petty cash fund, the recipient fills out a petty cash voucher.

How petty cash vouchers fit into the wider accounting system

• When the petty cash fund is replenished, the vouchers are used to account for the disbursements and to record them in the company’s general ledger.
• The petty cash custodian would then reconcile this transaction, ensuring the cash on hand matches the recorded expenses.
• The amount you select for your petty cash fund must be sufficient to cover small expenses over a designated period, usually one month.
• This distinction brings about differing levels of detail in recording financial activities.
• The primary aim is to streamline the process of managing small-scale expenses without involving the longer process of writing a check or making digital transfers.

It is used for transactions that are too small to warrant writing a check or using a credit card. In summary, petty cash is a handy tool that helps businesses efficiently handle small, everyday expenses while keeping proper records to ensure everything is in order. By effectively managing petty cash and regularly reconciling it, businesses can ensure their balance sheets accurately reflect their financial status.

How does petty cash software make petty cash management easy?

• Each voucher should detail the date, amount, purpose of the expense, and have an authorized signature.
• When a petty cash fund is in use, petty cash transactions are still recorded on financial statements.
• In this comprehensive guide, we will delve into the multifaceted aspects of petty cash vouchers, exploring their purpose, preparation, essential elements, and their pivotal role in accounting.
• Columnar petty cash books and imprest petty cash books are two types of petty cash books.
• This helps identify discrepancies and ensures that all expenses are accurately accounted for.
• By keeping a record of each transaction, it’s easier to track expenses and ensure that funds are being used appropriately.

The concept of petty cash has been around since businesses needed quick access to small amounts of money. Historically, managing minor transactions was cumbersome due to the bureaucratic process involved. Petty cash funds were introduced to mitigate this challenge, offering a practical solution for companies. Petty cash vouchers work well for businesses that manage occasional, low-value expenses and require a physical transaction record.

How to fill out a petty cash voucher?

Since petty cash isn’t normally a material amount of money, petty cash is accounted for in the most expedient way possible, just like supplies are. A petty cash fund is a small amount of money that a business keeps on hand to cover minor everyday expenses such as office supplies, postage, or cab fare. Petty cash is useful for quickly covering minor incidental expenses that would be impractical to pay by check or credit card.

Regular Reconciliation

Communicate these policies to all employees to ensure consistency and compliance. These cards can be loaded with a specific amount of money, allowing employees to purchase within the set limit. However, as the volume of transactions grows or teams become more distributed, the limitations of manual voucher systems become clear. Paper vouchers become time-consuming, prone to errors, and slow down approvals as receipts pile up. The table below outlines the advantages and trade-offs of using petty cash vouchers, helping you assess if this system aligns with your business’s needs.