Petty Cash Float

Topic: Petty Cash Float

A suggested method of handling and controlling a Petty Cash Float:

The following maintenance should be performed:

1.  Petty Cash Float GL Account

create a General Ledger (GL) account in the Asset section called Petty Cash Float

2.  Petty Cash Float Cost Centre

create a Cost Centre (CC) for the Petty Cash Float and link to its corresponding GL Account

A cheque is drawn for the initial float amount, e.g. $200.  This is achieved by posting an invoice coded to the General Ledger or Balance Sheet job (GENLED or BALSH) and the Petty Cash Float Cost Centre.  The Supplier would be the Company or Cash and the cheque would be cashed and held in a Petty Cash tin.  As the cash is used from the tin, dockets are kept for tax and accounting purposes.  The GL account balance of the Petty Cash Float will always be $200 (unless this amount is formally increased), and the contents of the tin should always total $200 in cash and/or dockets.

Posting the Petty Cash dockets:

Method 1: post invoice (INV) entries for each docket and code these to the appropriate Jobs and Cost Centres; the Supplier will be your Company or Cash.  Use the Reference or Comments field to record the actual Supplier's code for cross-reference purposes.  The invoices are then selected and paid and the cheque is cashed to replenish the Petty Cash tin.  n.b. GST should be recorded accordingly against each invoice transaction.

Method 2: post an invoice for the total value of existing dockets in the tin and code the invoice to your Company or Cash as the Supplier; the GENLED Job and the Petty Cash Cost Centre; and draw a cheque.  The total GST Paid Tax Credits should be recorded accordingly.  Then post Journal entries for each transaction (as per the dockets but excluding GST) and the offsetting total (typically a credit balance) to the Petty Cash Float account or a Petty Cash Clearing account, example:

               Job                Cost Centre                GL A/C                        Debit                Credit

               97013                20H (FitOff H/W)        5.11                55.60

               97026                16B (Sand)                5.11                45.00

               GENLED        PEABC123                4.6011 (MV Petrol)        25.00

               GENLED        POST                        4.7 (Postage)        12.50

               GENLED        PCF                        1.11 (Petty Cash Float)                        138.10

               To allocate Petty Cash expenditure to appropriate accounts as at 30/6/2000