Advantages and disadvantages of petty cash book

Petty cashier is not allowed to keep idle cash with him if the float is found to be more than adequate. Meaning of petty cash book, its importance and advantages. The main advantages of petty cash book publish your articles. The advantages of the imprest system are as follows. Marks the advantages of using the imprest system are. Petty cash is a comprehensible and common method of paying for business operating cost.

Advantages, disadvantages, and the pex alternative. Petty cash is an easy to understand and familiar method of paying for company expenses. Here we discuss the format of petty cash book, types of petty cash systems. Petty cash book makes possible for making comparison of the petty expenses between two periods and helps in controlling such petty expenses more effectively. Some of your workers could use the cash for purchases such as lunch or other personal needs that do not benefit your business. Is there a better way to solve the small expenditure dilemma. Commission of fraud is reduced as the chief cashier verifies petty cash book alongwith vouchers and the petty cashier is more responsible. Petty cash book 2019, imprest system of petty cash.

Petty cash would be susceptible to a accounting errors because it has no sufficient documents for tracking the cash. Petty cash is a small amount of cash on hand used for paying expenses too small to merit writing a check. What are the main advantages of maintaining cash book. The small cash transactions taking place a significant number of times daily if recorded in a general cash book may make it. The following points highlight the importance and advantages of petty cash book which can be taken as its objectives as well. The advantages of analytical petty cash book are given below. Guidelines for petty cash funds guidelines for payment advantages of using petty cash disadvantages of using petty cash highlights of petty cash fund. 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. The voucher would show the date, amount, recipient, purpose and general ledger account. When petty cash is easy to get to employees, it is a suitable way to pay for little purchases. What are the advantages of a imprest system for petty cash.

The disadvantage of a petty cash book is that it contains so many small entries. The voucher would show the date, amount, recipient, purpose and. Petty cash would be susceptible to a accounting errors because it has. A petty cash book is a book of vouchers which are prepared each time a disbursement is made from petty cash. Petty cash is a small amount of discretionary funds in the form of cash used for expenditures. Petty cash book maintains records of all petty payments systematically. Many expenses of small nature are recorded in petty cash book. It relieves the cash book and the chief cashier of the burden of recording tiny and frequent payments. Petty cash book helps in making the major cash book more informative, clean and clear by including only major transactions. Disadvantages of petty cash your business arizona republic. It makes records of all petty expenses are payments systematically.

As head cashier check the accounts of previous month and gives advance for the coming month, does, errors if any are reduced. The petty cashier has liability not to expend the petty cash more than. Advantages and disadvantages of receipt and paymen. 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. Advantages and disadvantages of analytical petty cash book qs. It is possible to find out daily cash and bank balance. Many expenses of small nature recorded in petty cash book, the number of transactions is reduced in the cash. Cash book also serves the purpose of book of original entry as well as ledger. Cash and bank transactions can be recorded in cash book. Due to lack of control, petty cash are always in a chance of misappropriating of the fund. Learn more about petty cash expense management, and decide which system is right for your business. The regular check of the petty cash book creates a sense of responsibility in the petty cashier. The petty cash book is a method to increase organization and efficiency in accounting records for.

Main cashier can focus on other major financial transactions of the business. Here are some advantages and disadvantages to using petty cash as an expense management solution. Petty cash book relieves the main cashier because it is prepared by the petty cashier. Advantages and disadvantages of analytical petty cash book. Importance and advantages of petty cash book business performing a large number of petty transactions usually maintain a separate petty cash book.