Petty cash is a small amount of physical cash kept on hand for minor business expenses that are impractical to pay by cheque or electronic transfer.
Petty cash is a float of physical cash maintained for small, incidental business expenses. Common petty cash purchases include office supplies, postage, taxi fares, parking, small refreshments and other items under a set threshold (typically $50-$100). The petty cash system uses an imprest system: you start with a fixed amount, spend from it (keeping receipts for every purchase), and when it runs low, you replenish it back to the original amount. The replenishment amount should equal the total of all receipts since the last top-up. Petty cash requires its own account in your chart of accounts and should be reconciled regularly. Every transaction must be supported by a receipt or voucher showing the date, amount, purpose and who authorised the expenditure. Despite the small amounts involved, petty cash should be managed carefully as it is vulnerable to misuse. SortBooks helps by suggesting the right accounts for petty cash replenishment transactions in Xero, while you still check the balance against physical cash on hand.
SortBooks helps with the bookkeeping behind petty cash by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing petty cash by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
A cash book is a financial record that tracks all cash receipts and payments in and out of a business. In modern bookkeeping, it is typically maintained through your accounting software's bank register.
Internal controls are processes and procedures designed to safeguard business assets, ensure accurate financial reporting and prevent fraud or errors.
An expense is a cost incurred in the process of earning revenue. Expenses reduce your profit and are recorded on the profit and loss statement in the period they are incurred.
Reconciliation is the process of comparing two sets of records to ensure they agree. Common types include bank reconciliation, accounts receivable reconciliation and intercompany reconciliation.
A receipt is a document confirming that a payment has been made. Businesses need receipts to support expense claims, tax deductions and audit requirements.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.