Do you have a petty cash tin locked away under your desk or next to the reception table? Technology has come a long way in the accounting and payments space, but the use of petty cash tins has not changed in decades. Unlike what its name suggests, petty cash is anything but “petty” and can hurt a business if not managed effectively.
In theory, managing petty cash sounds pretty straightforward. You assign a person in the office who looks after a cash float for things like office supplies, catering and other small expenses.
However, it’s important to remember that the ATO has a tight record-keeping process for petty cash. Even if you only have spare change in cash tins, you are required to keep a record of all transactions, all receipts and a running balance on your petty cash account.
As you can see, this practice can create several challenges around security and effective management.
Cash is vulnerable to theft – Unless your manager is meticulous when it comes to security and management, chances are everyone in the office knows where the tin is kept. Whether it is a dollar here and there or the entire cash box, having cash lying around creates opportunities for theft as it is virtually impossible to track missing money. In some cases, money stealing goes undetected for a long time so much so that it creates a financial drain for the business.
It’s harder to maintain a high level of record-keeping. Let’s be real, no one has a full-time job managing petty cash. The responsibility tends to fall on administrative staff or managers. It’s not surprising when the management of the petty cash declines over time due to a lack of attention on record-keeping or insufficient training on the correct process.
Then there’s the exasperating task of receipt management. Chasing receipts only to find that it is illegible but still having to file it away. All of this takes time for your manager and employees. And in a business, time is literally money!
So if not cash then what?
If you’re looking for a safer and more convenient approach to petty cash management, consider the use of prepaid cards. They are essentially a digital form of petty cash that allows you to control your spending and keep a record of your transactions.
You might be thinking at this point – aren’t I just replacing cash with a piece of plastic? At Vasco Pay, we believe that prepaid cards are more than pieces of plastic, but a powerful tool to help your business save time and money.
How Vasco Pay works is that you can distribute a prepaid card to every employee who needs access to petty cash, then the petty cash manager can track all of their transactions under one admin account through our Online Management Portal. You can load money onto the cards when funds are running low. At the end of the month, or whenever it suits your business, you can download transaction reports that you can file away for record-keeping purposes or plug into your accounting software.
For employees needing access to petty cash, they no longer have to ask the petty cash manager for cash on items where approval is not needed. With Vasco Pay Prepaid Cards, cardholders can also check their balance and transactions through a mobile app. Going cashless with prepaid allows employees access to contactless and online payments, all of which are more convenient, secure and safer than using cash.
If you’re interested in finding out how Vasco Pay can help you to best manage your petty cash account, then visit our SME page today.