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Senior Explorer *

How to record Petty Cash & Expenses

A cheque was written to one of the owners for business expenses to be incurred.  The transaction was recorded as <write cheque>, payee <her name> and account <Petty Cash Account>.

She has submitted the business receipts.  

1) How you would enter the receipts?.  Journal Entry?  - transaction would be Credit <Petty Cash> for receipt total and Debit <Receipt totals> and breaking out sales tax? 

2) Is there a way to enter the receipts to record the vendor?  In other words if the receipt is from Denny's Office Supplies is there a way to record the name of the vendor?

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Best answer 03-11-2019

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Established Community Backer **

To record the receipts: use Write cheques function. Selec...

To record the receipts: use Write cheques function. Select Petty Cash as the Bank Account; payee (the Supplier - like Staples), Expense Account Office Supplies, apply the appropriate Tax Code. In a perfect world, that would clear the Petty Cash account to zero if the receipts totalled the amount of the cheque written to the owner. If there is a small difference, leave it to be applied in future transactions. At yearend, the balance in petty cash is expensed. 

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Established Community Backer **

To record the receipts: use Write cheques function. Selec...

To record the receipts: use Write cheques function. Select Petty Cash as the Bank Account; payee (the Supplier - like Staples), Expense Account Office Supplies, apply the appropriate Tax Code. In a perfect world, that would clear the Petty Cash account to zero if the receipts totalled the amount of the cheque written to the owner. If there is a small difference, leave it to be applied in future transactions. At yearend, the balance in petty cash is expensed. 

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Ah, Yes of course! - that would record then the Vendor in...

Ah, Yes of course! - that would record then the Vendor in the Petty Cash Bank.  Perfect. And expensing to the correct account.  Another question impossible - what about when there are A LOT of receipts to enter and in this case I don't want to track each vendor - how would you enter it?  I generally just to an excel and summary each account expense.  How would you enter that then?
Senior Explorer *

Would you use Write Cheques and Select Petty Cash as the...

Would you use Write Cheques and Select Petty Cash as the bank account; and leave payee blank?
Not applicable

Write the check to John Doe (owner) from the account that...

Write the check to John Doe (owner) from the account that John received the funds.  Enter the total amount for office supplies on one line, total for any other type of expense on a second line, etc. Sales tax should be included in the expense amount.  If John buys $100 of office supplies and pays 7% sales tax, office supplies should be $107.00.

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Thanks for your reply.  Here's the scenario.  The receipt...

Thanks for your reply.  Here's the scenario.  The receipts from previous year end current year piled up for John.  Then a cheque was written to John for say $500.  The receipts not add up to $500.   A cheque was written knowing he was spending money out of pocket.  Then the receipts came in but not necessarily adding up to $500.
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That's what I would do.

That's what I would do.
Established Community Backer **

You can't leave the payee blank, but you could create a V...

You can't leave the payee blank, but you could create a Vendor called Misc. Vendors (or something meaningful to you), select Misc. Vendors as the payee, the Petty Cash Bank Account, record the Total amount of the Expenses in the top part of the cheque (for $89.65, and use a line to record each expense (Office Supplies $ 23.44, Fuel $30.00 and so on). QB does not calculate Sales Tax correctly if there is more than one line item, so when entering Office Supplies for instance, the amount should not include the Tax. Then apply the Tax Code. You must do this for each expense type. At the end, there may be a small discrepancy - edit (overwrite) the Sales Tax Total to balance to the total on the receipts and click the Recalculate icon at the top of the window.

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@Impossible...you can absolutely leave the payee name blank.

@impossible...you can absolutely leave the payee name blank.
Established Community Backer **

You're right - I see now that it is possible. I would sti...

You're right - I see now that it is possible. I would still use a Vendor  - if only to make it easier for anyone else (or subsequent bookkeepers) to follow the trail.