Practical Relative Payment in a Transaction
Easy regulation makes the existence of petty cash really helps every element in a company to carry out its activities. You don’t need to worry about a complicated payment system. Why is that? Because petty cash is very practical to use to make payments in small amounts.
Budget for Daily Purposes
Various kinds of facilities are usually provided by the office to increase productivity or make employees feel happy when working in the office. One of the facilities that usually always exist in every company is a kitchen.
Petty cash is also very useful in meeting the daily needs of employees. For example, when tea in the kitchen suddenly runs out, you don’t need to worry because you only need to use petty cash to buy tea.
Petty Cash Method
Apparently, there are also many benefits of petty cash, then what is the method of recording petty cash that is usually used by companies? Let’s look at some of the methods used for recording petty cash!
Fixed Method or Imprest Fund System
The fixed method is a petty cash bookkeeping method in which petty cash accounts are always constant because the amount of the replacement is proportional to the expenses that have Expenditures made by petty cashiers are also not made in the journal directly, but you only need to collect evidence of transactions from expenses made by the company.
The Characteristics of the Permanent Method
Some features of applying a fixed method in petty cash you need to know:
You just have to gather evidence in every transaction that you have done before. Later, you can use the evidence as evidence to request compensation from the company’s finance.
Every fund from petty cash comes from withdrawing the same amount of money as the petty cash fund that has been spent. Thus, the petty cash balance always remains as before.
When the replacement process occurs the cashier will record the evidence provided by you will be recorded in a petty cash disbursement journal for your use of petty cash funds.
Fluctuation Method or Fluctuating Fund System
The fluctuation method in petty cash is a method of charging and controlling finances where the amount is always changing. That is why petty cash balances always change. In contrast to the fixed method, the fluctuation method for expenses made by petty cashiers is made in a journal.
Characteristics of the Fluctuation Method
Some features you need to know about fluctuations in petty cash methods:
Refilling by the petty cashier is done in the debit funds section of the petty cash account.
Every transaction evidence reported by the company to the petty cash register will always be recorded in a petty cash accounting journal.
The large amount of funds will continue to change or not change because it is adjusted to the activities carried out by the company relating to the use of funds in petty cash.