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Tuesday Tips and Tricks
                                  March 5, 2013

It's Not "Petty" If You Lost Money 

Not keeping a check of petty cash funds is a major problem. Many businesses do not keep a track of petty cash expenditure and often take amounts out of the cash float without recording them. If petty cash expenditure is not monitored and controlled accurately by a bookkeeper this may lead to a business not claiming all of its business expenditure and thus it may end up paying more in business tax.


If you handle petty cash for your employer, or help clients set up a petty cash system, you know that if anything goes wrong, you will be blamed. Petty cash funds are not a way to get around cash disbursement controls. They enhance efficiency by providing cash quickly in the following situations:


  • When the formal system is too costly. Surprisingly, producing a check can cost as much as $2.50 or more. A $25 purchase is not worth it.
  • When the formal system is too slow. It often requires 1-5 days to process a voucher and produce a check, too long for a $25 item needed right away.
  • For special situations, such as cashing employee paychecks or providing advances for travel and conferences (some firms don't allow this).

Typical Problems


Controls: Generally, one custodian is responsible for petty cash and decides who can get petty cash, requires an i.d. for each disbursement, authorizes petty cash payments only for acceptable purposes, observes authorized payout limits and requests reimbursements. But if the custodian is at a doctor's appointment, no one gets cash, so consider having two or three custodians who coordinate their schedules. A different employee should book reimbursements, and still another should review distributions, and amounts.


Shortages: Petty cash funds often run out. To determine how much to keep in the fund, check last year's replenishments. Were they weekly? monthly? quarterly? Here are some guidelines:


  • Determine the ideal number of days between replenishment dates. Every 10 days? 20 days? 30 days? The less frequently you replenish, the more cash the fund needs.
  • Know how long replenishment takes. Is it same day? 3 days? a week?
  • Decide how many funds to have.

Security: Keep petty cash in a fireproof, locked, limited access safe, locked metal box, or vault, depending on the fund's size. Do not leave safes and boxes unattended. Limit access to only the petty cash custodian(s).


Reimbursement: Set dollar limits and make sure the custodian observes them. Have clear rules on what can be reimbursed. Prohibit accepting employee IOUs in exchange for cash for personal use.


Replenishment: Replenish before funds run low. Require that all completed petty cash vouchers be in numerical order and in ink (not pencil) with receipts attached. Replenish at least monthly.


Permanent change in the petty cash amount: Firms often overlook the need to change the amount because it is not systematically reviewed. At least yearly, review the amount as follows: Compare the replenishment each month to the monthly balance. If the amounts replenished are close to the fund balance (within 10%), increase the amount. If the replenishments (especially in peak months) are 30% less than balance, decrease the amount. Investigate whether employees with legitimate needs were denied petty cash during the year, and adjust decisions on permanent changes accordingly.



A well-run petty cash fund includes:

  • set dollar limits on petty cash disbursements;
  • reimbursement limits based on type of outlay;
  • reimbursements only for valid business expenses;
  • restriction of petty cash only to certain employees;
  • lists of reimbursable miscellaneous expenses;
  • requiring completed, sequentially numbered vouchers to account for each disbursement;
  • requiring receipts for all vouchers when possible;
  • periodic reconciliation of cash and vouchers;
  • prohibition of disbursements for personal checks; and
  • distribution of petty cash policies to employees.

 Need a better set-up for your Petty Cash Fund?  Call us at 877-966-4441 or email us.


from the Bookkeeping Tips of The American Institute of Professional Bookkeepers



Get Your Own Coffee!


Hiring a virtual secretary for your business help you gain more time for doing the tasks that actually make money. That is surely the most important thing you want to know. Many business owners or internet entrepreneurs today are still trying to do a hundred and one things every day, including those time-consuming tasks that they should not be doing. If that is happening to you, you should consider hiring a truly skilled and highly qualified secretary to help you in building your business.


Although, you may think, there is no one else who can do the tasks better than yourself, the smart way of delegating the tasks to others remains the best way to go if you want to utilize the best potential of your company.


A virtual secretary, or also known as virtual office assistant, is an administrative expert. She or he specializes in providing clients with an ongoing administrative or office assistance support in a collaborative relationship and most importantly, uses the latest advancement in technology and business management tools to do the job for you.


When looking for the right virtual secretary, there are practical points that you need to keep in mind as you go about the process of selecting the best candidate for the job:


  • Set Up an Online Meeting. This is a good way to actually hear the person talk or chat with you through Skype or Live Chat. This can also serve as your actual interview or a test to see if she or he is the one you have been looking for.
  • Ask for References. You just have to ask the person if she or he can show you some of his or her previous works. This way you will know the candidates field of expertise. This is also a good short-cut of determining the person's strengths or weakness when it comes to performing the actual tasks. You can also evaluate the applicant's level of skills and experience. Just make sure that they are true testimonials from real clients.
  • Ensure that Your Virtual Secretary has the Proper Equipment. This is very important to know that the virtual secretary is employed in a reputable virtual assistance company

Hire the best and qualified virtual secretary for your business. Please visit us at and get the professional advice and service that is right for your business. 


Thanks, Kathy!

"It is my pleasure to recommend the services of Off-Site Business Services to you. During the past 15 years, Kimberly Shannon, President of the company has provided us personalized bookkeeping services to our 'book' business, handling our accounting needs with accuracy and fast turnaround time."


"The company offers top-notch quality, service and rates. They are prompt, professional, and have a very good understanding of our service. Across the board, we are always pleased with their work."


"At our library, it is cost prohibitive to add full-time staff to manage bookkeeping, along with the prospect of adding new equipment or software. But using Off-Site Business Services provides the most cost-effective way to run the financial side of a non-profit operation."  


"I highly recommend using Off-Site Business Services and believe you will be very pleased regarding the value they add to your organization. I have taken the liberty to include a brochure on their services. Please call Kim for a free one-hour consultation. One call can save you hours of time and dollars of cost."


Kathy McSwain

Director of Library Services

Chicago Ridge Public Library

Off-Site Business Services, Inc.
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Kim ShannonKimberly Shannon


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