Balance or reconciliation of petty cash account

is there a way i can perform a reconciliation or balance of a petty cash account.
currently i can only reconcile the two bank accounts i have, not a cash on hand account.

Count it. With petty cash, there are never pending deposits or withdrawals. The purpose of a bank reconciliation is to verify and account for the float that occurs because deposits and withdrawals have not been presented and/or processed.

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The Petty Cash account balance should = the money in the tin - if yes, then it is reconciled.

What is an imprest system of petty cash and how is it reconciled?

An imprest system of petty cash means that the general ledger account Petty Cash will remain dormant at a set amount. For example, if the petty cash custodian is entrusted with a locking bag containing $100 of currency and coins, then the Petty Cash account will always report a debit balance of $100. This $100 is the imprest balance. As long as $100 is adequate for the organization’s small disbursements, then the general ledger account Petty Cash will never have an entry again.

When the coins and currency in the locking bag get low, the petty cash custodian will request a check to replenish the coins and currency that were disbursed. Since the requested check is drawn on the organization’s checking account, the Cash account (not the Petty Cash account) will be credited. The debits will go to the expense accounts indicated by the petty cash receipts, e.g. postage expense, supplies expense. In other words, the general ledger account Petty Cash is not involved in the replenishment. (Replenishment means getting the total of the coins and currency in the locking bag back to $100.)

Under the imprest system, the petty cash custodian should at all times have a combination of coins, currency, and petty cash receipts equal to $100, the imprest amount.

Control occurs through the review of the petty cash receipts attached to each check request for replenishment. It also occurs by occasionally confirming that the items in the locking bag do indeed add up to the imprest amount.

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@Geraldine_Cobbin-She, you may find @sam’s post informative. Note, however, that an imprest account is a special form of petty cash account specifically designed for accountability without the need to be constantly making entries into the main accounting system. Many, if not most, petty cash accounts for small businesses are not imprest accounts.

However, if your reason for asking about reconciliation was to enforce accountability on whoever maintains the petty cash, an imprest account is an easy way to do it. This turns the custodian into your police officer. S/he either has the money or has receipts accounting for what is gone. Like s/he must have documentation for extra amounts.

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Just make Petty Cash a Bank Account, problem solved.

Making a Petty Cash account a Bank account doesn’t resolve the topic’s question - “is there a way I can perform a reconciliation of a Petty Cash account” - as there is no “Statement” to import as there is with Bank accounts.

Kinda confuse. by technical using manager, doesn’t need to post an entry? is more on physical practice in organisation?

or is it like we’re only need to post an entry to expense by lump sum and redeem by lump sum?

or don’t need to touch petty cash at all? just using cash account whenever the employee given us the receipts to replenish?

Your question is not clear, @acecombat2. It is not possible to tell whether your question relates to the original question, which was posted 6 months ago, or one of the responses, or whatever. I suggest you start over and describe your situation completely.

There are two options with regards to operating a Petty Cash account.

  1. Transaction - This way is very much like a bank account, every transaction (deposit & payment) is entered. The balance of the money remaining would equal the balance on the Petty Cash account.

  2. Reimbursement - After the initial setup no transactions are entered into the Petty Cash account. Instead, when the petty cash needs replenishment do a Spend Money for the lump sum and the Account lines would match the expenses.

@Tut I just don’t understand clearly the imprest system.

@Brucanna, the first I’m understand is a normal entry like bank accounts. The second approach, is like petty cash is like someone else’s account the one who holds in trust so whenever he or she claim for reimbursement. I just need to spend (in petty cash account of my books) it total amount of receipts that they gave to me?

The Imprest system and the (2) Reimbursement are the same, just different names.

Very close - Yes the Petty Cash is held in trust, when they need reimbursement they submit the total amount of receipts but you Spend Money from the “bank” account of your books as that is where the money (cash cheque) is coming from to replenish the Petty Cash.

The Petty Cash account of your books doesn’t get any entries, it just represents the money being held in Trust. The cash plus the receipts should equal the Petty Cash account.

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Do an internet search. You will find many discussions of how they work.

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Thx brucanna for confirming my understanding.

Going back to Geraldine_Cobbin-She’s first question on petty cash reconciliation. I want to reconcile the petty cash account the same as it happens with the bank account but if i make this into a bank account it will read this as a bank account on the Balance sheet. Is there a way to make it a bank account for reconcilaition purposes but change the setting so this account is added to cash on hand not cash in bank?

@Lara, you need to read the answers to the question. You reconcile a petty cash account by counting it. There is no other possible manner, because there is no statement.

You can create a Petty Cash control account first then create a Petty Cash Bank Account and choose the Petty Cash control account. This would keep it separate on the balance sheet.

I get what Lara is trying to do, I reconcile my “undeposited credit card sales” account weekly just to confirm it is at zero. There is never a balance but I find it helpful to confirm that. If there is a balance it reminds me I missed a fee somewhere and go back and fix it.