Overhauling petty cash

[ahr56]

I am an experienced bookkeeper and I'm considering starting a business to overhaul how SMEs handle their petty cash.

Petty cash is usually a tin of around £100 kept in a "safe place" and it's a pain in the neck to administrate and keep track of.
It would be far better for the kinds of businesses I work with if their employees were to download an app and could be assigned a temporary IBAN card to make small purchases from a single petty cash account, which can be topped up by bank transfer and transactions loaded into accounting software.

What do you think of this idea?

Some pretty successful companies have been formed (Pleo, Soldo) cantered around this idea, though they focus on the idea of company expense cards rather than a digital petty cash account from which all assigned cards draw funds.

More secure, more convenient and easier to take account of in terms of reporting.

 

[Bob Morgan]

It sounds as though the Bookkeeping System for Petty Cash is dictating how 'The Company' does business. In my own case, we deal with Small Sole Operators who insist on Cash. We have dealt with them for a long time and at times payments are not exactly 'Petty.' However, it is all properly accounted for.

 

[Mark T Jones]

This might be a solution looking for a problem?

People will move to a card if it's quick/cheap/easy, Few will flag it as a priority.

 

[DontAsk]

I've never had petty cash and don't use the PC account in my accounting software.

How many businesses actually still have physical petty cash is the question you should be asking.

 

[thetiger2015]

We use it just as cash, we wouldn't need a card. We have a piece of paper in the box with a signature and the amount taken/returned etc. It's really not a big issue and we don't need it as a card, thats just too much effort, it's sometimes used for parking £2 or a sandwich from the shop for £5, we don't want those micro transactions on any cards.

 

[Daybooks]

It is called petty cash for a reason.

 

[NicoJ]

I've never had petty cash and don't use the PC account in my accounting software.

How many businesses actually still have physical petty cash is the question you should be asking.

In my experience the majority of businesses have a petty cash account.

To answer the question it is fairly simple to create a spreadsheet and import it into accounts software. It's also quite easy to establish a loaded card type scenario to manage expense claims. I would be expecting limits to be placed on the expenses themselves so drawing from a pot would be a control issue for me.

 

[IanSuth]

We used to have a time with money, 99% was for buying teabags and milk with the odd purchase of physical stamps.

If it got below a £5 another £50 was put in, all receipts shoved in tin and amounts entered on an excel spreadsheet which simply had

Amount carried over from month before
expenditures
drawings
balance

1 sheet per month

at end of year if amount in tin tallied with spreadsheet then receipts stapled together and given to accounts to go with rest of their paperwork and spreadsheet wiped to start again

In £10 years it always tallied and office was opposite a sainsbury's - all purchases were from there

 

[KM-Tiger]

In £10 years it always tallied

Blimey, that deserves an award.

My experience of petty cash is that it *never* tallied, often by an annoying few pence.