The problem with petty cash boxes and what you should switch to

The expense management question

How do you manage your expenses? Petty cash is one way of paying for small items that’s becoming increasingly unpopular. It may sound simple, but it’s a system that’s laborious, inefficient, and vulnerable to theft or misuse.

There are much better expense management options out there, such as prepaid cards, but before we get into that, let’s take a look at cash boxes specifically and see why it’s time for a different process.

What is a petty cash box?

The design of a standard petty cash box hasn’t changed in decades. The average one is a small box that comes with a cash drawer, cash tray, coin tray and built-in key locks. The person in charge of this box and the funds within it is known as the petty cashier, or petty cash custodian.

They will keep track of what’s in the cash box with a petty cash book, which logs all of the transactions the fund is used for and categorises them based on expense type. When an employee wants to use some of the petty cash, they go to the petty cashier, use the cash for their purchase, then file away the receipt for later reconciliation.

With a petty cash box you can implement an imprest system. This involves having a fixed amount in the petty cash fund per period, for example £1,000 per month. The petty cash custodian makes sure this is topped up at the beginning of each new period. With imprest, you always know the maximum that will be spent each month, but the maintenance of this process is another thing to factor into admin-time.

This is a lot of steps, and if you think it sounds like an ancient way of handling money, then you’re not wrong.

When should you use a petty cash box?

We’ve gone through a number of problems with cash boxes, but if you are still using petty cash as an expense management system then you should definitely use one, as they’re more secure and easier to manage than a loose cash tin.

A well-maintained cash box can make the difficult system of petty cash much easier to handle. If you, your petty cashier, and your team are all on the same page when it comes to petty expenses, then everything should run a lot more smoothly.

However, no matter how much safeguarding you implement, petty cash will never be an ideal system.

Why it’s time to move on

Once upon a time, petty cash boxes were a secure way of handling small expenses, but technology has moved on. While petty cash boxes offer certain conveniences, like easy storage and quick access, the risks far outweigh the rewards. In the world of online banking, the cash box has become an antique.

There are a number of obvious security concerns with a petty cash box. For starters, it’s portable, so the risk of theft is much higher than digital storage like online bank accounts. Even if your cash box accounting is strict and thorough, a cash box will never provide the level of security or visibility necessary for efficient spend management.

As well as security issues, cash boxes also have a problem with visibility. Because the process relies completely on manual data entry, it means there’s a lot of room for error. Even if your petty cashier stays on top of the reporting, employees could forget to save receipts, and you may not be able to view your spend data until a complete reconciliation is carried out. It’s a recipe for overspending.

Secure your cash with Soldo

By switching to Soldo prepaid cards you can be sure that company money is safe. Soldo’s infrastructure meets the highest standards of security, integrity, and stability. Our systems are designed for maximum uptime, and all security activities are performed in-house by Soldo experts.

This will give you greater peace of mind than a cash box. And if your team ever does need physical cash, they can use the prepaid Mastercard® cards to withdraw money from one of 1.5 million supported cash machines.

Soldo is a prepaid system, so you can order as many cards as you like and assign them to individual team members (or entire teams). Simply load them with a balance and employees can use them as they’d use a company credit card or personal debit card. They just need to snap a photo of the receipt when they carry out a transaction and all the spend data is collated in the Soldo mobile or desktop app.

This way, there’s no direct link to your business bank account, and because you’ve set the budgets and the rules, you always know where the money is. As soon as an expense is paid for, the transaction appears for you to view from anywhere.

To give you complete visibility we provide statement, balance and transaction reports:

• The statement report shows line-by-line transaction activity similar to a credit card statement.
• The balance report allows you to easily check the balance on a user’s card at any given time, which gives you a precise overview of monthly spend.
• The transaction report offers granular reporting on transaction-types and project-based spending so you can assess expenditure across different parts of your business and stay in budget.

Then when it’s time for bookkeeping, you can send spend-data to accounting software in no time at all. We have full integrations with QuickBooks, Xero, and NetSuite, as well as compatible exports into any other accounting software.

Find out more about replacing your petty cash box

This is just the tip of the iceberg. Our platform is scalable, making it ideal for teams of any size.

We’ve built a system in which cards, apps, and a web platform work seamlessly together. With Soldo, you can manage expenses in real-time from the point of purchase to the reconciliation. A Soldo plan is the perfect replacement for a petty cash box.

Achieve financial peace of mind by signing up to Soldo today and making expense management a breeze.