Petty Cash In Quickbooks
When you are setting up your chart of accounts in quickbooks, you will most likely want to set up a few cash accounts. One of the accounts might be a petty cash account.
Petty cash is just cash that you have around for various business purposes. You don’t want to have to go to the bank every time you need cash, so you will have what is called petty cash available at your business.
How to create petty cash account in quickbooks
In order to set up your petty cash account. Do the following steps.
1. Go to settings
2. Select chart of accounts
3. Select new to create a new account
4. You should see an account type drop down
5. Select bank from the drop down
6. Next find the detail drop down
7. Select the cash on hand
8. Enter petty cash for the nickname
9. You will have to maintain this balance manually based on the amount of cash you pull out of your checking account. The opening balance will be whatever you input for the cash that you currently have on hand.
10. Select save and close
How to account for petty cash in quickbooks
There are two ways to account for petty cash in quickbooks. You can account for it as a check or as a transfer. This is because you can withdraw cash from your checking account, or you can write a check to cash.
How to record petty cash when you write a check
- Select new for a new transaction
- Select check
- Select petty cash as your payee. You might have to add petty cash as a payee if you haven’t already done so.
How to record petty cash when you don’t write a check
If you just take cash out of your checking out for petty cash, then :
- Select new
- Select transfer and record the movement from your checking account to petty cash
How to reconcile petty cash in quickbooks
Reconciling petty cash in quickbooks might seem hard because it is just petty cash right? Well you might have to implement a system at your company to reconcile petty cash if one doesn’t already exist.
You should record all of your petty cash transaction with receipts or slips of paper so that you don’t get sloppy with your company’s cash. Accounting principles should apply to your petty cash as well. This means that your petty cash slips and receipts should reconcile to your petty cash lockbox or safe. You should keep track of what goes in and what goes out.
Quickbooks petty cash entry
Increasing petty cash
Dr – petty cash
Cr – checking account
Paying expenses with petty cash
Dr – expense
Cr – petty cash