Advantages and disadvantages of petty cash book

Commission of fraud is reduced as the chief cashier verifies petty cash book alongwith vouchers and the petty cashier is more responsible. The petty cashier has liability not to expend the petty cash more than. The small cash transactions taking place a significant number of times daily if recorded in a general cash book may make it. What are the main advantages of maintaining cash book. Advantages and disadvantages of analytical petty cash book. Advantages, disadvantages, and the pex alternative. Many expenses of small nature are recorded in petty cash book. Petty cash is an easy to understand and familiar method of paying for company expenses.

Guidelines for petty cash funds guidelines for payment advantages of using petty cash disadvantages of using petty cash highlights of petty cash fund. Main cashier can focus on other major financial transactions of the business. A petty cash book is a book of vouchers which are prepared each time a disbursement is made from petty cash. Here we discuss the format of petty cash book, types of petty cash systems. Most cash should be deposited right away in the bank, but a small amount can be kept on hand in a petty cash account earmarked for minor.

Many expenses of small nature recorded in petty cash book, the number of transactions is reduced in the cash. As head cashier check the accounts of previous month and gives advance for the coming month, does, errors if any are reduced. It relieves the cash book and the chief cashier of the burden of recording tiny and frequent payments. The main advantages of petty cash book publish your articles. The advantages of the imprest system are as follows. Cash and bank transactions can be recorded in cash book. Marks the advantages of using the imprest system are. The voucher would show the date, amount, recipient, purpose and. Petty cash book maintains records of all petty payments systematically. Petty cash book helps in making the major cash book more informative, clean and clear by including only major transactions. The advantages of analytical petty cash book are given below.

Some of your workers could use the cash for purchases such as lunch or other personal needs that do not benefit your business. Petty cashier is not allowed to keep idle cash with him if the float is found to be more than adequate. Petty cash is a small amount of cash on hand used for paying expenses too small to merit writing a check. It is possible to find out daily cash and bank balance. Petty cash book makes possible for making comparison of the petty expenses between two periods and helps in controlling such petty expenses more effectively. The voucher would show the date, amount, recipient, purpose and general ledger account. The following points highlight the importance and advantages of petty cash book which can be taken as its objectives as well. Cash book also serves the purpose of book of original entry as well as ledger. Petty cash is a comprehensible and common method of paying for business operating cost. What are the advantages of maintaining a petty cash book. Is there a better way to solve the small expenditure dilemma. It makes records of all petty expenses are payments systematically. Advantages and disadvantages of receipt and paymen. The regular check of the petty cash book creates a sense of responsibility in the petty cashier.

Petty cash is a small amount of discretionary funds in the form of cash used for expenditures. The petty cash book is a method to increase organization and efficiency in accounting records for. Here are some advantages and disadvantages to using petty cash as an expense management solution. When petty cash is easy to get to employees, it is a suitable way to pay for little purchases. You need to develop a set of policies or procedures dictating the handling of cash in your business to avoid problems such as theft and misappropriation. Learn more about petty cash expense management, and decide which system is right for your business. Advantages and disadvantages of analytical petty cash book qs. Importance and advantages of petty cash book business performing a large number of petty transactions usually maintain a separate petty cash book. Disadvantages of petty cash your business arizona republic. Petty cash book relieves the main cashier because it is prepared by the petty cashier. Petty cash would be susceptible to a accounting errors because it has. What are the advantages of a imprest system for petty cash.