Whether you have a big organization or you are running a small business, you need to record everything. Recording everything enables business order to keep track of the money that is received by the customers and that is being spent on various things. Businesses use different tools in order to ensure that they have a well-maintained record sheet for recording everything. Various tools can be used for recording different details. One of the most commonly used tools is a petty cash log.
What is petty cash?
The amount of cash that a business keeps in its locker is called petty cash. It is usually a small amount of money that a business receives on a day to day basis.
It is very important for everyone dealing with petty cash to make sure that it is saved in a proper place and the amount of petty cash is accurately entered in the bookkeeping system. Maintaining petty cash is the same as your bank maintains your bank account.
People spend some amount from the petty cash and then the amount of money that has been spent is replenished so that the amount of petty cash does not reduce. There is a fixed amount of petty cash that needs to be maintained.
Where is petty cash used?
- When customers purchase small items from a business, the business receives the money and keeps it as petty cash.
- When a customer buys something from the business and business needs to give the change to the customers
- The amount of cash paid by the customer is held by the business in the form of petty cash.
What is a petty cash log?
A petty cash log is a record sheet in which the amount of money received and paid as petty cash is recorded and then maintained. The businesses use this log because it helps them keep a record of the cash.
Four different columns collect details such as:
- Amount of cash that has been withdrawn
- The purpose of withdrawing the money from the petty cash
- Details about the checks that are written from the petty cash account
- Details about the money deposited to the petty cash account
Depending on the needs of the business, there can be many other details that can be added to the petty cash log. If a business has to use a petty cash log and wants to create it, it can take help from the sample log worksheet which is available in the form of a template.
It is very easy to create a petty cash log. All you need to do is open the MS Excel sheet and start filling columns with relevant details. There are also many printable forms available on the internet that are useful for people who want to keep the physical log of their transactions. They can simply fill the forms and then print them.