Mismanagement of your petty cash may not seem like a big deal but poor handling of petty cash costs UK businesses millions every year. Problems arise when receipts “go missing” or the process of managing petty cash becomes far too complicated. With that in mind, can you afford to lose money through mismanagement? We wanted to share some tips to manage your cash more responsibly.
Set up an account
You may want to consider setting up another account solely for your petty cash. This will keep your main business account separate, making it easier to manage. If you are a larger company you may even want to consider setting up different petty cash accounts to correspond to every department to keep the process simple.
Lost receipts and confusing processes are the main issues facing your business when it comes to managing petty cash. Keep the process simple by assigning responsibility to one or two members of staff. This makes it easier to keep track of everything and eliminates some of the risk associated with lots of people being involved with managing petty cash.
Outline some guidelines
The easiest way to make the process problem-free is by creating some guidelines. This way, everyone that manages petty cash knows what is expected and everyone that requires money from petty cash to work understands the process and what is required from them. Make sure that all necessary personnel are fully trained, this will reduce the chance of mistakes being made.
Don’t leave all of your receipts until the end of each quarter, regularly enter in a timely manner so that you can keep an up-to-date record of your petty cash transactions. Monitoring your petty cash will mean that you can avoid any receipts “going missing” and catch any discrepancies early enough to resolve them.
Don’t lose track of your petty cash, you will end up losing valuable money. Decide on the right amount of money to run your petty cash, this will require a little bit of trial and error. Set limits on the amount that employees can spend, this will keep them under control and stop frivolous spending.
Cash flow is important to a business, and that covers every aspect of your finances including your petty cash. If you struggle with late payments and have an instable cash flow then contact Commercial Domestic Investigations on 08444 159200, use our contact form or email firstname.lastname@example.org.