Petty cash has long been a quick method of providing funds for employee purchases. However, purchases made using cash are sometimes easily forgotten, difficult to track and ultimately challenging for accounting. Is the petty cash box a help or a hindrance? Is there a better way to solve the small expenditure dilemma?
Here are some advantages and disadvantages to using petty cash as an expense management solution:
Advantages to Using Petty Cash
Petty cash is an easy to understand and familiar method of paying for company expenses. It is an accessible, convenient way to pay for small purchases. When a business doesn't provide access to company credit cards, or employees would rather not wait to be reimbursed for purchases, using petty cash is a simple alternative.
Disadvantages to a Petty Cash System
Overall, petty cash is a largely outdated and inefficient system. While convenient for small purchases, it is not a realistic solution for larger expenses. The bigger the company, the harder it is to track outgoing petty cash, change and receipts. This makes the entire petty cash system susceptible to abuse or fraud. For most businesses, these downsides of using petty cash far outweigh the advantages.
A New Alternative to Petty Cash
Fortunately, there is an alternative. Prepaid cards, such as the PEX Prepaid Card, offer a more precise way of managing small expenses. Everything from lunch to a subway ride can be charged on the PEX Card. That means no more cash leaving your office or change to turn in. More importantly, there is now an auditable digital record of every transaction.
With the PEX platform, a finance team now has visibility into where money is spent in real-time, and can allocate funds to employees as needed – anytime, from anywhere. And who needs a petty cash drawer when most merchants accept Visa debit cards?
Learn more about how PEX works, and get started with simpler expense management for your business.