PETTY CASH TIPS FOR CUSTODIAN

Here are some tips for day to day Petty cash treatment & keeping :

Petty Cash Opening (5 minutes time allocated)

Do the follwing step At the beginning of working day:

1. Open the "Petty Cash Spreadsheet"

2. Check every farmula on cell remain correct

3. Open the "Petty Cash Reconciliation sheet" as well

4. Check every formula and make sure no erroneous on it

5. Fill the expected opening balance column (it should be equal with the previous actual closing balance)

6. Perform physical count

7. Put the physical amount into the "Petty cash Reconciliation Sheet" right on the actual opening balance column.

8. Compare the actual opening balance with the expected opening balance, it should no variance. Should any variance arisen, make a note (memo) to be submitted and approved by Financial Controller.

Now you are ready for your today's very first transaction


Petty Cash Receiving (5 minutes time allocated)

1. Once the cash received from Checking account, Count the cash right away

2. Issue a cash receipt slip

3. Put the cash into the petty cash box

4. Update petty cash book/spreadsheet

5. Compare the updated balance with the actual cash in the box, it should be equal with previous balance plus cash receipt

6. File the slip to a binder labeled with "Petty Cash Receipt "


Petty Cash Disbursement (5 minutes time allocated)

1. Verify purchase request received from department, make sure it's written and authorized, correctly follow the procedure set by the management.

2. Check unit price with authorized price list

3. Do a quick cross checking with inventory custodian about stock availability, in the case that request made on an availability stock, refuse the request promptly. Otherwise go a head to the next step.

4. Do a quick test by re-calculate the total amount.

5. Do a quick cross checking to the authorized person for the purchase.
write a cash receipt to be signed by purchaser

6. Disbursed the cash (always avoid a cash advance, this will minimize variance possibility much lessen and final daily reconciliation become headache no more).

7. Update petty cash spreadsheet

8. Compare the updated balance with the actual cash in the box, it should be equal with previous balance minus amount on the slip

9. File the slip to a binder labeled with "Petty cash disbursed "


Petty Cash Physical Count (3 minutes time allocated)

Always performed "quick physical count" every time cash just received or disbursed. It will keep your cash always in neat and clean balance time to time. However, deeply physical count to be performed on every opening and closing day.


Petty Cash Reconciliation (5-10 minutes times allocated)

Once the physical count is done, put the physical amount into the "Petty Cash Reconciliation sheet" compare the actual amount with the expected ending balance pulled from the petty cash spreadsheet or download from the Financial Information System.

Should any variance occurred, perform the following step :

1. check the formula on the spreadsheet to ensure correctness, if it still not fixing

2. If the above still not fixing, do re-count the physical cash

3. Compare amount written on the slip with amount you type on the spreadsheet or system, make sure it's tied out. If you catch the error, fix and compare it again. Mistyped often happened.

4. If it's not fixed yet, screen for any IOU's or Cash advance given to purchasing custodian.

5. Compare again, keep tracking it back, till the error is found and fixed it.

It should matched now, you may go head and start for closing day process.

Reconciliation process become a very time consuming when quick physical count is not always performed on every single transaction.


Petty Cash Closing (5 minutes time allocated)

Once reconciliation has completed, make a daily audit report and reconciliation, signed by you (as a custodian) and the Financial control to approve it. always lock the box and save the box in a metal cabinet

For further reading, I recommend to read : Typical Events and Conditions on Petty Cash, Petty Cash Spreadsheet, Petty Cash Reconciliation sheet.