You can create a petty cash account to manage your petty cash transactions and perform account reconciliations.
Manage a Petty Cash Account
To set up a petty cash account:
- Add an operating bank account. In the Bank Name and Account Name fields, enter Petty Cash.
- Add a deposit transaction to post your opening balance.
- From the Type field’s drop-down, click Adjustment In.
- In the From field, enter your firm’s name.
- From the Account field’s drop-down, click 3100: Opening Balance Equity.
- Enter withdrawal transactions to record your expenses.
- From the Type field’s drop-down, click Adjustment Out.
- In the To field, enter the recipient’s name.
- From the Account field’s drop-down, click the appropriate COA.
- Properly record future contributions when you replenish the account.
- Use the Internal Bank to Bank Transfer tool when transferring funds from your operating account.
- Posted adjustments for contributions and replenishment to Account 2550: Internal Bank Transfer. If you use the Bank-to-Bank Transfer tool, this will happen automatically.
- Reconcile your account.