2020: Time to Replace Petty Cash?
The petty cash tin is the lifesaver during your business’ time of need; when your café has an unexpected rush and you’ve run out of milk for the coffee machine, or your colleague tells you about the birthday presents they opened this morning ( ... with no mention of a card from work).
Petty cash is an amount of physical cash that is kept on the business premises for small unplanned expenses.
Over 50% of UK employees have had to use personal credit cards or go into their overdraft due to business expenses, so having instant access to the petty cash box removes the need to pay out of your pocket - and you don’t have to take time out of your day to fill out expense claim forms.
While there are advantages to having a petty cash tin at work, the risks often outweigh the benefits.
Managing the petty cash tin is often a low-priority task and is handled manually using an excel spreadsheet or paper trail. This makes it almost impossible to share the information with other departments based outside of your premises, such as your accountant or finance team, to review in real-time.
As a result, fraudulent activities could take place and go undetected for long periods.
Petty cash is usually kept in a locked tin or drawer on-site, so locating keys for the tin is vital - but if the key-holder is absent or forgets to bring the keys to work, you have no access to these funds, which creates another problem needing to be solved, or puts more of an onus on your employees to fork out of their own pocket for the required essentials.
With new rules introduced due to the pandemic, customers are incentivised to use contactless payments in shops and restaurants, resulting in a significant reduction in the use of cash and therefore the demand for alternative ways to access petty cash is more prevalent than ever.
The most effective way to improve the management of petty cash is to use technology, so you can account for every penny spent and eliminate the need for handwritten notes or forms.
The ability to scrutinise where every pound has been spent is essential for smooth accounting, and keeping digital records of receipts enables you to reclaim VAT on expenses too.
Through Expend, you can oversee spending across your entire business without any hassle.
By providing your teams with Expend’s prepaid cards, you have peace of mind that your teams can access business funds while you retain full control of spending.
You can set spending limits on cards, restrict ATM withdrawals or online transactions, and even block spending in certain sectors, such as pubs or bars - leaving no room for misuse.
Plus, your employees don’t have to wait around to be reimbursed - two of the most common reasons for expenses not being reimbursed are losing the receipt or missing the deadline. Automating the expense process solves both these problems easily.
Do you work in hospitality or tourism?
Watch our latest video here covering the temporary cut in VAT rates in the hospitality and tourism sectors, as announced by Chancellor Rishi Sunak, and how you can change your default VAT rates in Expend:
Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.
Written by Kayley Hunter
As head of partnerships, Kayley can be found working closely with accountants and leading accounting apps to help solve the expenses and spending problems faced by businesses through lasting partnerships.