FAQ Number : T1                                        Latest Update: 10/07/07

When dealing with petty cash in Private Funds Manager, there are two choices :

1. You draw petty cash by writing a cheque from your bank account to top up petty cash.
2. You hold some of the cash received as income and do not bank it, but use this as petty cash.

In the first instance, petty cash is treated as a separate bank account (although its not a bank account at all, just a cash tin) and needs a new account created on Private Funds.

In the second, the Cash in Hand account that exists by default on Private Funds is the account you need to use.

In both cases, as cash is spent, the transactions need to be analysed in terms of which accounts they relate to.

We will look at how to manage each of the 2 instances mentioned above - 

If you draw petty cash by writing a cheque from your bank account to top up petty cash.

1. Create the Petty Cash Bank Account

If you need to create this new account, go to –

Transaction Entry – Transfers – Bank Transfers

Click on the NEW button

Enter a code for the petty cash account, eg PC and a description such as Petty Cash.

Save

2. Transfering cash into Petty Cash from the Bank

To draw a cheque from the bank for petty cash.

Transaction Entry – Transfers – Bank Transfers,

Select your Bank Account for the FROM box and Petty Cash for the TO box. Entering a date, narrative and amount to transfer.

3. Making Payments from Petty Cash

Payments can be made from petty cash, in the same way as all other payments.

Transaction Entry – Payments

Select the short code the payment relates to, but make sure in the column Bank Account that you enter the code for petty cash ie PC.

If you hold some of the cash received as income and do not bank it, but use this as petty cash.

1. The ‘Cash’  Account

This exists be default in PFM so does not need to be created.

2. Holding cash back from bankings for petty cash

When you processing a series of receipts in Transaction Entry – Receipts – the total cash received is automatically totalled at the bottom of the CASH column. If you do not want to bank all of that cash, simply type in the amount of cash to send to the bank in the very bottom white box marked Total to Bank. Anything remaining will be transferred to the Cash In Hand box until that cash is spent.

3. Making Payments from Petty Cash

Payments can be made from cash, in the same way as all other payments.

Transaction Entry – Payments

Select the short code the payment relates to, but make sure in the column Bank Account that you enter the code Cash

4. To reconcile Petty Cash

Transaction Entry – Bank Statements

Select the code for the petty cash / cash account, at top left of the screen

‘Tick’ items to reconcile.

Click on Commit Changes when the account is balanced. The closing balance should equal the amount of cash currently held in your tin.