When it comes to keeping track of every transaction of a business or organization, even the smallest ones cannot be ignored. At the same time, it is to be remembered that jotting down all the transactions, notwithstanding their amount, type and details, may create confusion.
Hence, different accounts are used for this purpose, and one of them is known as the petty cash book. This records all the little and routine expenses of a business paid in cash.
For example, there are expenses like tea, hygiene products, hiring casual labor, newspaper, snacks, and other necessities. These payments are not made with cheques but rather with cash, and usually, a petty cashier keeps track of these expenses and the cash book.
This whole system functions under the chief bookkeeper. Like a standard cashbook, the petty version also has a credit and debit column, where all the purchases are entered into the debit column and the rest of the expenditure in the credit column. There are two types of petty cash books, and they are:
1. Columnar petty cash book
2. Analytical petty cash book
Understanding these two types will help you gain an in-depth understanding of an organization’s accounts and financial management. So, the below description will be crucial in this journey:
Columnar petty cash book
1. The different money sections in this book help track everyday expenses. This book has two sections: the debit end and the credit entry.
2. All the cash revenue and cost details are recorded in a solitary column known as a specific column, and the dates, including both debit and credit entries, are recorded in another column.
3. The cash amount received from the chief accountant is included in the debit amount field.
4. The specifications for documenting expenditure also ensure that the credit column includes several cash columns. This documentation includes expenses in a specific category and sequential order.
5. There is a requirement for the overall money field on the credit column for entering each expenditure for calculating the total expense.
Analytical petty cash book
1. This book includes several monetary columns for recording the credit part, a single cash field on the debit field, a specific column, and the date column. These details are similar to the columnar petty cash book.
2. Similar to the columnar petty cash book, the chief bookkeeper provides a specific amount of cash to the concerned person ahead of time so that specific expenses can be completed within a specific period.
3. The petty treasurer provides the chief cashier with a statement detailing all the expenses once this specific period is over.
If you are considering whether to keep a petty cash book or not, it is vital to understand the needs and advantages of the decision before making your choice. The following points will highlight the benefits of maintaining a petty cash book:
1. With this system in place, you can meet the real money requirements without much hassle. It will also help in issuing the initial cash amount to the relevant authorities, with the stipulation of lowering or increasing the amount at any point (with data collected from the timeframe and frequency of the expenditure).
2. The chief accounting officer will monitor the petty cash book, ensuring reduced accounting errors.
3. This is a tried and tested method that has proven to be quite effective.
4. Keeping track of every expenditure will make saving money easier, and any issues or doubts regarding the finances will be solved promptly.
Now to focus on the other topic of GST search by name, and though it may seem unrelated to petty cash, there is no denying that GST is now integral to every aspect of your business.
So, understanding GST and the need to know the details of your organization registered on the GST website is also necessary. In the GST portal, you will find that every registered taxpayer is given a unique alphanumeric number known as GSTIN. If you have this number, it is mandatory to mention it on every invoice.
The GSTIN is 15 digits long, and the format is as follows; the first 2 digits are state code, the next 10 digits are PAN number, the 13th digit indicates if the registration number and PAN number holder are from the same state, the 14th digit is Z and the last one is a random checksum digit. This number is beneficial and required for various reasons, such as tracking sales, supply details, payments, and, most importantly, identifying the business. The GST number search by name is a smart and simple way of gathering all necessary information about a business so that you can follow the GST laws.
If you wish to check out the authenticity, reputation, reliability and financial status of a business, searching the GST website is enough. Searching by name, you will find all the necessary details, including authenticity, registration status, details of the purchases to find out if the company is trying to dupe you or not and more.
With the help of this neat little trick, you can be sure that the client you are about to start dealing with is authentic and will benefit your business. In this age when various scams are becoming more common, having such a method at your disposal is beneficial for every business.
