In the modern world, there is advent of lot of business. Investors trade not only in their own country or region but also try to take their nose front when compared with their competitors by expanding their business to other countries. This is typically the consequence of globalization. The different parts of the world is now connected quite easily with the various means of communication and the advent of internet has made things quite simple as it has drastically reduced the cost of communication.
With this trend, the business has grown a lot and obviously there is an increase in amount and type of transaction that is being done. With the increase in transactions, there is also an increase in the use of different types of books that is used for accounting purpose. Now with the advent of various systems and data maintenance policies, it has become quite difficult sometimes to get quick cash for any expenditure. The advent of stringent system is also very important because it helps maintain the record and hence this also cannot be replaced. But that doesn’t mean that each time when one needs some money for the day to day expenditure, he has to follow the tedious process and get his payments delayed.
For urgent cases and for small expenses, the book introduced is called as Petty Cash Book. This is nothing but an extension to the cash book. Hence this will be used to maintain the records that pertain to small expenses that may include postal charges, transit fares and entertainment expenses. This will usually be a manual entry register and hence the tedious process of accommodating the details into the system can be avoided. A typical petty cash book will consist of three columns for credit. There will be a main column where the total amount that is paid will be recorded. Also this will be also being noted down into a special column but it depends on the type and nature of expenses. Usually different columns will be used for different kind of expenses, each being specific to their own role.
Vouchers are kept as a record on the credit side of the petty cash to record any cash payments. The use of vouchers is to record the amount and the title of the expenses that provided with the clarity about the type of expense. Also the date will be provided for reference purpose. Usually these will be signatory documents which need to be maintained in such a way that before giving the cash, the signature has to be taken from the receiver. Also the same will have to be approved by the authorized person. Usually in all the organization, a pre-defined amount of money will be registered for petty cash and there will be a target not to exceed the mentioned amount. Hence this will be typically verified during the end of month against the actual expenses.