It's useful for office managers and bookkeepers to have cash on hand to pay for miscellaneous office expenses. The petty cash fund is a small cash reserve -- typically less than $200 -- locked in a cash register or cash box onsite. As employees use petty cash, they should keep a log of what expenses the petty cash was used for and how much was used. When petty cash is running low, record the petty cash expenses in QuickBooks and pull out more cash to replenish the fund.
Create the Petty Cash Bank Account
- Navigate to Chart of Accounts. In the bottom left-hand corner of the screen, click on Account and select New.
- For new account type, select Bank in the Account field and write Petty Cash as the account name.
- Keep the opening account balance as zero and select Save & Close.
Record Money Withdrawn For the Petty Cash Fund
When you get cash to replenish the petty cash fund, record it in QuickBooks. The two easiest ways to increase the petty cash fund are to write a check out to cash and cash it, or to withdraw funds from your bank using a debit or ATM card.
Cash from a Check
- Under the Banking menu, select Write Checks.
- List "Cash" as the payee and record the amount of the check in the payment column.
- Under the Account drop down menu, select the Petty Cash bank account.
- Select Record.
Cash from an ATM Transaction
- Under the Banking menu, select Transfer Funds.
- Under the Transfer Funds menu, select the Petty Cash bank account.
- List the amount of cash withdrawn in the Transfer Amount field. In the memo field, write "Petty cash withdrawal."
- Select Save.
Record Petty Cash Expenses
- Navigate to your Chart of Accounts and select the Petty Cash bank account
- In the account register, open a new transaction. It's not necessary to record a payee, though you can if you want. If all the petty cash was spent on one payee, you can enter a payee name like "Ralph's Office Supply" or "Starbucks Coffee" if you'd like. Otherwise, leave the payee field blank.
- Enter the amount of petty cash spent in the payment column. In the Account drop-down menu, select the expense account that correlates with the purchase.
- If the petty cash expenses span multiple accounts, select the Splits function and record the expense amount for each account.
- Select Save.