Setting up petty cash

Setting up petty cash

Petty cash is a small fund kept on hand for quick, routine expenses—supplies, postage, refreshments, repairs. Rather than process a full purchase or payment for every small item, petty cash lets you manage these costs efficiently.

Before you start

• You must have admin access to create accounts and configure settings.
• Decide on the amount you want to keep in petty cash (e.g., 5,000 AFN).
• You need an existing bank or cash account to draw money from when you top up petty cash.
• Ensure your chart of accounts is set up (you'll need to add a petty cash account if one doesn't exist).

Steps

1. Create a petty cash account in your chart of accounts.

   Go to Accounts Open in Usystems and select the option to create a new account.

   • Account name: Enter a clear name such as "Petty Cash" or "Petty Cash – Main Office."
   • Account type: Select Asset (petty cash is a current asset).
   • Currency: Choose the currency for this petty cash account.
   • Save the account.

2. Initialize the account with an opening balance.

   Once the account exists, you may need to enter a journal entry to record the initial petty cash float. For example, if you're seeding petty cash with 5,000 AFN from your bank account:

   Go to Transactions Open in Usystems and create a new journal entry:

   • Debit: Petty Cash account (5,000 AFN)
   • Credit: Bank account (5,000 AFN)

   This records that money has left the bank and now sits in petty cash.

3. Confirm the account appears in your settings.

   Go to Settings Open in Usystems and look for any petty cash or cash account configuration. Some workflows may ask you to designate a default petty cash account here.

Accounting impact

When you first set up petty cash, you move money from one asset account (bank) to another (petty cash). No income or expense is recorded at setup—it is simply a transfer of funds. As you spend from petty cash, the spending will be recorded via expenses (or purchases) as the money is reimbursed.

Tips & common mistakes

• Keep one petty cash account per location or fund manager if you have multiple offices or custodians. This makes it easier to reconcile and track who is responsible for what.
• Do not use petty cash as a general account for all small expenses—it works best for truly small, frequent, routine costs. Larger or less-frequent items should go through purchase orders or bills.
• Reconcile petty cash regularly (weekly or monthly) to confirm the physical cash matches the account balance.
• Top up petty cash before it runs out rather than letting it drop to zero. A low balance can delay small purchases.