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Step 1 Create a new creditor for Petty Cash – Cash Creditor (Keep this creditor separate for petty cash only)
Note: In the financial Ledger account have Petty cash as the creditor control account.
Step 2 Create a Cash Cheque for your Opening Petty cash amount.
In order to create a cash cheque:
- Enter a creditor purchase for Petty cash opening Balance
- In the creditor purchase entry select VATEXEMPT and Ledger number as Petty Cash/ Invoice number as Petty Cash Reimbursement
- Save and activate the purchase entry and then make payment using creditor cheque payment screen.
The Final Journal effect of the above will be:
Cr Cash xxxx
Dr Petty Cash xxxx
Step 3 Entries of Expense Claims:
Non - inventory expense claims
- Enter in Creditor àPurchaseà Purchase
- Select creditor as Petty cash
- Enter the creditor Name and TIN number in the reference field to be reflected in the TAX report
- Enter the appropriate invoice detail and save and activate.
Inventory Item Expense Claims
- Receive in the goods as non-ordered items (Purchase Order à Receive Inventory)
- Create a purchase invoice for the receival slip (Purchase order à Purchase Invoice)
For Example:
$100 – Electricity Bill Claim
$40 – Petty Cash used to Buy inventory Item
$60 – Entertainment Expense Petty Cash
$300 – Was the initial petty cash entry
Step 3 Making Cheque for the reimbursement amount.
Finding out the Reimbursement amount – Perform a petty cash reconciliation
General Ledger * Cash Book * Bank Reconciliation
Note: Create a new Bank Reconciliation at the initial state you can have one petty cash reconciliation account for a year or may be for 6 months interval or even whichever period you prefer. (Please note if you select to prepare monthly then you would need to create new Petty cash Reconciliation every month)
-To Show the transaction
Record* Utilities* Check for New Transaction
Enter the Petty cash Bank Statement closing balance $300 as per the screen shot below and tick those transactions presented.
Print the bank reconciliation
- As per the above example you had $300 at the initial Stage – Opening
- Currently you have $100 in your till.
- The total for Un- presented Cheque you need to prepare cheque for the petty cash Creditor
Note: Users can print the petty cash reconciliation and keep it with your record with the cash cheque prepared for the amount of $200 to get the till amount back to $300.
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