It’s public knowledge that senator Joe Lieberman went through a reported $380,000 in petty cash during his 2008 election campaign. There’s nothing petty about hundreds of thousands of dollars. Where did that money go?
While a run for office ten years ago might have been able to write off spending as “petty cash” and move on, no campaign (or business) should function like that in today's digitally-enabled world.
To ameliorate challenges posed by the post-campaign finance audit, many leading political campaigns are eliminating cash and using PEX to be more transparent and more compliant.
A quick Google search on “petty cash procedures” shows that no business brushes off petty cash expenses lightly. Lots of time and effort has been spent working on regulating and documenting the money flowing into and out of the petty cash drawer.
Here are some dos and don’ts that can help guide your petty cash system and procedures:
Do make sure that all employees have access to needed incidental funds. Some employees might be in the position to need more petty cash than others, but all employees should know how to access it and be able to take out funds if the need arises.
Don’t put all the responsibility of petty cash on one person. The petty cash system does need a custodian and someone to ensure that everything is working as intended. However, each employee should feel responsible for their petty cash transactions. Encouraging shared responsibility will help foster responsible spending and thorough documentation.
Do decide on a set amount of petty cash. You can re-assess if this was too much or not enough. If you don’t want to deal with how many bills or how much change you need, consider an expense management system with a set amount in a bank account.
Don’t let petty cash be used for everything. This fund is really meant for small, immediate purchases. Set limits to what does and doesn’t fit under petty cash. With careful documentation, you should be able to check and see where the petty cash money is going and discourage larger purchases through the petty cash system.
Petty cash doesn’t have to be an undocumented mess, nor does it have to be a complicated burden. It just needs to have a clear purpose and straightforward process.
If you are using petty cash for larger purchases, you should consider an alternative system, such as the PEX Visa Prepaid Card. Schedule time with a PEX rep today to learn more.