Petty cash › Petty cash month-end closing

Month-end closing and checking the cash

Closing the petty cash book takes about twenty minutes once a month. It is the moment you prove that the cash in the box and the book agree, before small gaps become big ones.

Step by step

1. Write the last entries. Make sure every bill in the envelope is in the book. Look for slips still in someone's pocket.
2. Read the totals. The maker shows cash received, cash paid and the closing balance at the bottom of the book.
3. Count the cash with a second person present, note by note (see the table below).
4. Compare the counted cash with the closing balance.
5. Check the vouchers against the entries: same number, same amount, signed where needed.
6. Check the heads. Look at the "spent by head" table. Anything that looks unusually high deserves a question.
7. Sign. Fill in Cashier and Approved by, Save, and Print / PDF. Both sign the printout.
8. Carry forward. In Saved petty cash books, press Copy for next period. The next book opens with this closing balance as its opening cash.

Counting the cash

Write the count on a slip and staple it to the printed book. For a closing balance of ₹1,650:

Count IOU slips, personal cheques or vouchers as zero: only cash is cash.

When it does not match

First look for the usual reasons:

• A bill paid but not written in the book.
• An amount typed wrongly, for example ₹450 written as ₹540. A difference that divides exactly by 9 often means two digits were swapped.
• A top-up received but not written as Received.
• Change not taken back after a purchase.

If you still cannot find it, record the difference honestly. Write a shortage as a Paid line, "Cash short on count, 30 Nov", head Miscellaneous; write an excess as a Received line, "Cash excess on count". Have the approver sign against it. Small differences now and then are normal. The same cashier being short again and again is not, and needs a quiet conversation.

What to hand to your accountant

• The printed and signed petty cash book for the month.
• All bills and vouchers in number order.
• The cash count slip.
• Any GST bills in your business name, kept separately so they can be checked for input tax credit.

From the "spent by head" table the accountant can post one entry per head instead of forty small ones.

Keep a backup

Every book you save stays in this browser. After closing each month, open My data and press Save a backup file, and keep the file on a pen drive or in your email. Paper books and vouchers should be kept for at least eight years; your accountant can confirm the exact period for your business.