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Petty Cash Fund Setup/Process

Prerequisite Setup
1. Define Petty Cash GL Account and AR Clearing GL Account

NO AR Clearing Account setup yet in PROD


Define new AR Clearing Account (for closing PCF scenario)
2. Setup PETTY CASH as supplier

Enter one supplier record named "PETTY CASH" or: PETTY CASH FUND and create a
site under this supplier in the name of the employee acting as a petty cash administrator.

For example:
Supplier Name: PETTY CASH FUND
Site Name: c/o YOLANDA S. JIME (the Cash Custodian)

3. Enter the Petty Cash Custodian as Site NAME


Enter one supplier record named "PETTY CASH" and create a site under this supplier in the
name of the employee acting as a petty cash administrator

4. Define Receivable Activity as Miscellaneous Cash


NO Miscellaneous Receipts setup yet in PROD
Define new Miscellaneous Receipts (for closing PCF scenario excess Cash
Received)
Events:
A - Setup Petty Cash Fund
B - Using Petty Cash Fund
C - Closing Petty Cash Fund

A - Setup Petty Cash Fund

The petty cash administrator submits a petty cash request to the accounts
payable department for the amount of the new fund.
Enter the petty cash request as a standard invoice.

Create PCF Batch (sample only)


To setup/initiate Petty Cash Fund
DR Petty Cash Fund 50,000.00
CR Accounts Payable 50,000.00

Pay the petty cash administrator for the fund amount.

B - Using a Petty Cash Fund

1. The petty cash administrator maintains the cash.


2. Employees submit to the petty cash administrator completed petty
cash reimbursement forms and receipts for expenses. The
administrator reimburses the employees and maintains a petty cash
reimbursement log containing details of the expenses and the
accounts that should be charged.
3. When the petty cash administrator needs more cash, the
administrator submits to the accounts payable department a petty
cash request, a reimbursement log, and the receipts.
4. Enter the petty cash request as a standard invoice. Create invoice
distributions for the expense items to the appropriate expense
accounts. You may want to use a standard invoice naming
convention for the replenishment of a petty cash fund.

Create Replenishment Batch


Assuming out of 50,000.00 PCF, 25,000.00 for replenishment
DR Expenses 25,000.00
CR Accounts Payables 25,000.00

5. Pay the petty cash administrator a check to replenish the fund.

C - Closing a Petty Cash Fund

When you close a petty cash fund, the credits to the petty cash account
should equal the amount of the petty cash fund you are closing.

Prerequisites:
Establish a formal notification procedure for the administrator to
follow if the petty cash fund is to be closed or transferred to another
administrator.
If there is cash remaining in the fund, the administrator returns the
cash or writes a check to your company in the amount of the
remaining balance.

The distribution lines must sum to zero.


Record the amount of any returned cash by creating two invoice
distributions in the amount of the returned cash:

A positive distribution to the Accounts Receivable clearing account


A negative distribution to the petty cash account

Debit Entry to record Cash return


AR Clearing Account

Credit to close Petty


Cash Account
DR AR Clearing Account 50,000.00
CR Petty Cash Fund 50,000.00

***To Record Return of Cash and Close Petty Cash Account

Accounts Receivable Module


DR Cash 5,000.00
CR AR Clearing Account 5,000.00

o Close DR AR Clearing entry in payables and record the


returned PCF -Cash