Set Up and Use Petty Cash in QuickBooks Online

If you've ever run a business, then you know that one of the most important things to keep track of is your finances. And if you want to keep track of your finances in the most efficient way possible, then you need to be using QuickBooks Online. One of the great features of QuickBooks Online is that it allows you to set up and use petty cash. Petty cash is a small amount of cash that is kept on hand for minor expenses. In this blog post, we will show you how to set up and use petty cash in QuickBooks Online so that you can keep better track of your business finances.

What is Petty Cash?

Most small businesses have some sort of petty cash system in place to make it easier and faster to buy small items without having to write a check or use a credit card. Petty cash is a small amount of cash that is kept on hand for these types of purchases.

The first step in setting up a petty cash system is to determine how much cash you will need to keep on hand. This will vary depending on the size and needs of your business, but $50 - $100 is typically a good starting point. Once you have determined how much cash you will need, you will need to create a petty cash account in QuickBooks Online.

To do this, go to the Accounting menu and select Petty Cash. Then, enter the amount of cash you plan on keeping in the account and click Save.

Now that your petty cash account is set up, you can start using it for purchases! To do this, simply go to the Expenses menu and select Petty Cash. Then, enter the amount of the purchase and select the account that you would like to debit from (this should be your petty cash account). Click Save and your purchase will be recorded!

Why Use Petty Cash?

There are a few key reasons to use petty cash in QuickBooks Online:

1. To reimburse employees for small, out-of-pocket expenses.

2. To make small purchases without having to go through the hassle of setting up a vendor or creating an invoice.

3. To keep track of your company's spending in a more efficient and organized manner.

4. To have a backup method of payment in case of emergencies or unexpected expenses.

5. To take advantage of discounts for cash payments (if applicable).

How to Set Up Petty Cash in QuickBooks Online

Assuming you've already set up QuickBooks Online, setting up petty cash is a breeze. Simply follow these steps:

1. Go to Settings ⚙ and select Accounting.

2. Under Company Preferences, select the Petty Cash account drop-down and choose Add New.

3. Enter a name for your Petty Cash account and click Save.

4. You'll be taken to the Petty Cash account page where you can add an opening balance and specify the account details.

5. Once you're done, click Save and Close.

And that's it! You've now successfully set up a petty cash account in QuickBooks Online.

How to Use Petty Cash in QuickBooks Online

Setting up petty cash in QuickBooks Online is a simple process that can save you time and money. Here's how to do it:

1. Go to the Company menu and select Chart of Accounts.

2. Click on the New button and select Petty Cash from the Account Type drop-down menu.

3. Enter a name for your account, such as "Petty Cash," and click Save.

4. To add funds to your petty cash account, go to the Banking menu and select Make Deposits.

5. Select the Petty Cash account from the Deposit To drop-down menu and enter the amount of money you are depositing into the account.

6. Click Save Close when you're finished.

Now that your petty cash account is set up, you can use it to reimburse employees for small expenses or make payments for minor purchases without having to write a check or use a credit card. When an expense is incurred, simply go to the Banking menu and select Write Checks. Then, select the Petty Cash account from the Pay From drop-down menu and enter the amount of the expense in the check amount field. Be sure to include a description of the expense in the Memo field so you can keep track of where all your petty cash is going!

Conclusion

Setting up and using petty cash in QuickBooks Online is a great way to track small expenses and keep your business finances organized. With just a few clicks, you can set up your petty cash account and start tracking your expenses. And, if you ever have any questions, QuickBooks Online has a great support team that can help you out.

Reference: https://www.howeasyymart.com/read-blog/291