Petty cash control is a necessary thing, no matter the department or kind of project. The key to maintaining your sanity when dealing with petty cash is staying organized. In this article, we’ll briefly go over what petty cash is, and provide some great tips for dealing with it.
What is Petty Cash?
Petty cash is a determined amount of money provided to crew members for covering the expense of small goods and services. Petty cash is designed so crew members don’t have to use purchase orders each time they need to buy something small. The amount allocated to petty cash varies with different productions. The petty cash account is usually at least over $100, but it can be a much larger amount depending on the type of film production, overall budget of the project, and number of people on the crew. People tend to assume that strong control over petty cash isn’t necessary because it is typically used for smaller purchases, but this is a misleading generalization.
How Petty Cash Works
Petty cash is considered an imprest account, which means the total amount of money available for use in that account is always the same. For example, if your petty cash balance is $500, then $500 is the imprest balance. If you use all of the $500, the petty cash account may be filled up again to $500. You can do this as many times as the production’s budget allows, or as many times as your project’s petty cash account rules allow (ask your production accountant or producer for details on your petty cash account rules). You must always provide purchase receipts to explain all expenses that are bought with petty cash funds. Receipts should detail the time and date of the purchase, the total cost, the retailer and its location, and a description of the items that were bought.
Tips for dealing with petty cash
- Always collect and save receipts. You can’t account for any money spent without proper receipts. A missing receipt means the money used for the purchase is unaccounted for, so that money would need to be returned to the petty cash account—maybe even from your own pocket. Check with your production accountant or a producer for your production’s petty cash account rules.
- Always take a picture of your receipt. At some point, you’ll need to turn in a receipt for a petty cash purchase. But what if you lose a receipt? To help prevent lost receipts, use a digital tracking tool like PYCO, which allows you to capture an image of your receipt the moment you make a purchase. Petty cash receipts are traditionally stapled or taped to 8.5” x 11” sheets of paper (for easy filing). This practice may still be required by your production office even if you create a digital copy of the receipt. Making a digital copy of your receipt is always a safe bet.
- Keep petty cash purchases separate. Never mix personal and business purchases together. Why? The items will end up in one receipt, which is confusing and can cause unnecessary work for the accounting department. If you are buying a personal item while also making a business purchase, ask the store clerk to process the items on two separate transactions. You’ll be glad you did when it comes time to submit the petty cash receipt!
- Track petty cash digitally. A digital petty cash expense tracker like PYCO ensures transaction details are always available to the crew members who are keeping track of the budget at all times. Also by using a digital tracker, everyone on the crew knows what the balance of the petty cash account is at any time. No more wondering “Do we have any more petty cash left?”
- Try to use prepaid cards or digital wallets. Carrying around a wad of cash can make you a target for thieves, not to mention that it is easy to lose. Try to use prepaid cards, or digital wallets to avoid carrying physical currency. Cards can be turned off immediately if they get lost to prevent fraudulent purchases. Digital wallets are protected by additional encryption which makes them more secure than cash. Any remaining balances can always be transferred off these digital accounts when the production is over.
- Pay attention to your balance, and note transactions in your ledger often. Checking your petty cash balance often is a great habit so you don’t get caught with an empty account. It is an especially good idea to review the petty cash expenses at the end of every shoot day.
Petty cash control doesn’t have to be complicated
Petty cash control is easy when you have the proper procedures and tools in place to help manage it. Consider using the PYCO petty cash app to stay organized. You can request a free trial today! Also ask about our new virtual petty cash prepaid cards.