Five tips for better monitoring and controlling the use of petty cash

In any business there are times that you will need to use cash for purchases or events. This is fine, in and of itself. However, cash can be very difficult to monitor and control in a business. It's hard to know where every cent of change ends up. You have to be sure to get a receipt not only for when you receive the cash, but after you've spent the cash as well. So let's discuss five tips for better monitoring and controlling the use of petty cash in your business.

Having a petty cash fund at work, or simply allowing your employees to occasionally use cash (that you give them at your discretion) can be very difficult to control. This difficulty can be amplified especially when there are several people who are allowed access to your petty cash fund. Many companies keep a small fund of cash on hand for supplies and other miscellaneous financial needs. However, you should always keep this cash in a secure location, locked in a safe. Only people who are allowed access to the cash without consulting you should be allowed to carry a key to the safe with them. Otherwise you should be the one to give out access to the cash funds. Here are five tips to better cash management:

1. Keep good books on your petty cash box. This is especially important if multiple people are being given access to this fund. An excellent way to do this is to keep a sign-out form next to your cash box. Then, anytime someone accesses the cash fund, s/he must sign their name, date, time and record the amount of money taken from the cash box. You may even ask that they write their intentions with the cash. You should require that all receipts be turned in. This way, if your employees know what is expected from them, they'll help you rather than hinder you in managing your petty cash.
2. Use financial software. This is similar to the suggestion above. Instead of using a paper record of your cash expenditures, consider getting some financial software to help keep track of your cash. There are many great programs available that are helpful because they are saved on your computer. You never have to worry about rummaging through old paperwork because the records are saved with a great searching feature. Just make sure that you back-up the software frequently.
3. Count your petty cash. Another simple and obvious way to keep tabs on where your cash goes is by counting it several times throughout the day. This will be helpful in that if any unexpected losses occur, you'll be keeping track of how much money there has been throughout the day. You can then compare this to the record you have next to the cash box. This way you'll be able to record discrepancies. Plus, it will give you peace of mind to count the money in the box several times a day.
4. Don't give everyone access. Money has a much higher tendency to disappear when too many people have access to it. So consider just giving access to the petty cash to people that you trust. Don't give access to all your employees and don't give access easily. This will make a big difference in your stress level about the cash box as well as feelings among your employees about it.
5. Don't give anyone access. This may not be your first choice, since it leaves you with the bulk of the responsibility with cash. But it is a sure way to keep track of your cash. Or you can consider giving just one person access to your petty cash. Then, anytime someone needs cash they'll have to come to you or your assistant and explain what they need the money for.

Doing these 5 tips will help you control your petty cash.

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