Petty Cash: Definitions, Benefits, and Methods You Need to Know!
Financial records are very important in a company. This can show the amount of money owned by the company both from credit and debit transactions. In fact, good financial records can be used as an indicator to set a strategy at the company management level. Do you always record every money spent by the company even though the amount spent is only a little? If not, maybe you don’t know how important petty cash is for the company. Read the following review of petty cash to better understand it!
Definition of Petty Cash
In conducting a business transaction, the company does not merely spend large funds to pay for something. Without realizing it, companies can also spend money with a relatively small nominal but a lot of quantity. Even though the amount is small, every money that comes out needs to be made a bookkeeping to facilitate a company accountant in the company’s financial records.
Well, the bookkeeping will later be used to record any expenses incurred by the company in a nominal amount that is not too much, then called petty cash.
Benefits of Petty Cash
The name is indeed petty cash, but it has great benefits for the company. Here are some of the benefits companies can feel in the presence of petty cash:
Simplify Company Accountants in Financial Record
A company accountant has a heavy burden because it is his duty to make financial reports every month. He must have a high level of accuracy and also a strong analytical side to get accurate and accurate financial reports. The existence of petty cash will certainly greatly help an accountant in financial records. Later, he only unified expenditure data from each division in his company.
Can Be Used to Improve Company Services
In a business world, meetings in the office or in a dining area are common. What’s more if you are in a division that is often associated with external parties such as the event division. Of course you need to prepare funds to provide decent food to improve company services in the eyes of those who work with your company.
Emergency Funds for Companies
In the general affairs division, sometimes a lot of other division needs that must be met as soon as possible. Imagine if a general affair did not have cash and had to make an advance submission to the financial division to make transactions related to company activities? So this will certainly hinder the performance and activities of employees in a company.
It is different if a general affair has cash that can be used as an emergency fund when another division requests something suddenly without prior notice. So that the dynamics that occur within the company will soon be overcome easily.