What is petty cash management and how to maintain it, explains haeywa's Shilpa Mahna

Petty cash management is an important aspect of any business, particularly for those who need to make small, frequent payments. Petty cash refers to a small amount of cash that is kept on hand to cover expenses that are too small to justify writing a check or using a credit card. These expenses may include office supplies, postage, or other small purchases. Proper management of petty cash is essential to ensure that these expenses are tracked and accounted for, and that the cash is not misused or stolen.

"The first step in managing petty cash is to establish a petty cash fund. This is typically a small amount of cash that is kept in a secure location, such as a locked cash box or drawer. The amount of the fund will vary depending on the size of the business and the frequency of small purchases. It is important to set a reasonable amount that can cover the expenses that are likely to arise without being so large that it becomes a target for theft," Shilpa Mahna Bhatnagar, Founder of petty cash payments & management solution company, Haeywa, said.

Once the petty cash fund has been established, it is important to designate a person or team responsible for managing it. This person should be trustworthy and have the authority to approve petty cash expenditures. It is also important to establish clear guidelines for the use of the petty cash fund, including what expenses can be paid for with petty cash, what documentation is required for each expense, and what the maximum amount of each expense can be.

To maintain proper petty cash management, it is essential to keep accurate records of all expenditures. This includes maintaining a log of all petty cash transactions, including the date, the amount of the expenditure, and what it was used for. Supporting documentation, such as receipts or invoices, should also be collected and kept with the petty cash log.

To ensure that the petty cash fund is always fully stocked, it is important to regularly replenish it. This can be done on a regular schedule, such as once a week or once a month, or as needed. When replenishing the fund, it is important to reconcile the petty cash log to ensure that all expenditures have been properly accounted for.

It is also important to periodically audit the petty cash fund to ensure that it is being used properly and that there are no discrepancies in the records. This can be done by an internal auditor or an external auditor. The audit should include a review of the petty cash log, supporting documentation, and a physical count of the cash on hand.

"Proper management of petty cash is essential to ensure that small expenses are properly tracked and accounted for. This includes establishing a petty cash fund, designating a responsible person or team to manage it, establishing clear guidelines for its use, maintaining accurate records of all expenditures, regularly replenishing the fund, and periodically auditing the fund to ensure that it is being used properly. By following these best practices, businesses can maintain proper petty cash management and avoid the risk of theft or mismanagement," haeywa's Mahana said.

haeywa a financial technology company that provides petty cash payments and management services to its customers. The company recently announced its collaboration with Dish TV to help the India's leading DTH service provider streamline its petty cash payments and management using hayewa's innovative platform.