PhyllisGoldie and Associates
Phyllis Goldie and Associates
Petty Cash:  Abused, Misused, Ignored...

In our travels around the country one of the first things we inspect is the petty cash. This is a great indicator of attention to detail. While it may seem like a small item it has been our experience that when the petty cash is inaccurate or abused the rest of the books may be as well.

What we have seen: loans, "I Owe You's", personal items, such as cigarettes, candy, premium gas, red bull, alcohol, prescriptions and some we choose not to mention! Unapproved, unauthorized or unsigned receipts that now become a finger pointing game. 

What you can do right now:
  • Ask for the last three petty cash checks and supporting documentation
  • Set up company policy outlining the "Do's and Don'ts" of petty cash
  • Determine a specific amount to be kept in petty cash
What you should do going forward:
  • Audit at least once a month, make sure two people count and reconcile
  • Use petty cash slips with manager and receiver signatures
  • Limit amount used through petty cash (minor business expenses only)
  • Do not allow cash pay outs to be made from any cashier drawer - parts, service, body shop or other. All payouts go through an assigned person in accounting
Complete messes (like this pic) can lead to items not being charged to a unit in a timely fashion and creating over payment of commissions, overstatement of gross profit, and shortages (in one case $27,680 over a 12 month period!).

Petty cash is the most liquid asset of an organization and is easily misappropriated if business processes and controls are not established.  Take control today to eliminate  lost dollars tomorrow.

Phyllis Goldie and Associates, LLC | | 239.826.9544 |
Forwarded from a friend?   Subscribe to our newsletter here 
or  text  PGA to 22828