“Beware of little expenses. A small leak will sink a great ship – Benjamin Franklin
Petty cash, which represented barely 3% of the company’s total spending has shown a considerable rise in recent years. As businesses continue to grow, the cash requirement allocated increases accordingly. Due to the ease of availability and low liability, employees started using petty cash to make these one-time payments and it quickly became the norm. When petty cash began to climb into double-digit ratios, it could no longer be left unaccounted for and soon found a place in company budgets.
What is Petty Cash?
A petty cash fund is a small amount of cash kept on hand to pay small amounts, such as office supplies or small reimbursement.
What expenses account for Petty cash?
- Utility bills and rents
- Telephone and internet charges
- Small wages and advances
- Maintenance and repairs
- Staff welfare
- Small wages
- Miscellaneous
Most businesses face issues while managing petty cash as they are not sure about how funds are being used and there is no track of expenses. Sometimes branches run out of money or use excess money for personal use.
Key Challenges of Petty Cash Management
Cumbersome Distribution
Physical distribution of cash involves a high risk of theft, loss, and fraud. Also, a lot of time and cost is spent on travel while distributing the cash from branch to branch.
Unauthorized spends
Manual tracking and liquid cash lead to frequent cash leakage and frauds. Many times money is spent on unauthorized expenses without any approvals.
This leads to policy and compliance issues that are difficult to track manually.
Lack of control and visibility
Manual tracking of spends gives a lack of control and visibility over the expenses to the business owners.
Lack of financial visibility leads to unbalanced cash flows and mismatched accounts.
Labor-intensive and time-consuming
Managing petty cash involves lots of effort, time, labor, and cost. There is a loss of productivity while manually tracking and reconciling expenses.
How can we solve this problem?
The answer is simple – Digitize and automate your petty cash management
Petty cash management through a digitized card and automation helps in tracking the expenses and gives complete visibility and control.
Benefits of adopting to digital petty cash management:
- Distribute cash digitally
Allocate petty cash to each branch or location on the card to withdraw cash anytime.
- Monitor branch-wise expenses
Maintain optimum balances and stay on top of cash balances
- Cashless and automated processing
No physical distribution of cash and automated tracking of expenses.
The Bottom Line
Petty cash is no more a small affair and it plays a significant role in company expenses and budget .Modern businesses need a scalable and digitized system to manage their petty cash which give them complete control and visibility
Zaggle helps in automating petty cash management and digital transfer of funds that help in gaining complete control and accountability.
Here are the unique features of Zaggle Petty Cash Management:
- Quick cash disbursement
- Distribute the petty cash digitally
- Stay on top of cash flows
- Save time, cost, and labor
- Managing Discrepancies
- Automated reconciliation of expenses
For more information, contact us and get a free demo.
