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How do I book Petty Cash / Paid Out transactions in MarginEdge?

Michael Spitalney
Updated

Booking Petty Cash / Paid Out Transactions

No one wants to use Petty Cash, but we all (almost all) recognize the need and want to allow our restaurants the ability to do this.  But the accounting for this can be messy.  Here are three suggestions on ways to use MarginEdge to help manage your Petty Cash.

1.  Using the POS - Paid Outs Expensed by Receipt in Accounting System

Using Paid Outs in the POS has the advantage of settling your cash transactions daily by decreasing the expected cash on hand.  But, tracking these Paid Outs can be hard as it is not convenient to setup the POS with all the possible expense categories.  

A solution to this is to use MarginEdge to track both the POS Paid Outs and receipts.

To track the Cash:

  • Set 1 Paid Out button in your POS
  • Create a “Paid Out” as an account on your Balance Sheet as a Current Asset (any name is fine).
  • MarginEdge will then book all Paid Out transactions on the POS to this Current Asset account.

To track the Expense:

  • MarginEdge will create a “Paid Out” payment type in MarginEdge.
  • Tell managers to take pictures of their receipts, and to write “Paid Out” on the cash receipt.
  • MarginEdge will book the expense of whatever the receipt is – Produce, NA Beverage, Repairs, Etc – but book the payment to the “Paid Out” Current Asset.

If managers post all receipts for paid outs, the Current Asset account “Paid Out” will remain balanced at $0.  If they take cash without posting a receipt the account will turn negative.  In this way you can quickly see if all receipts are being collected.  And, if you want to see total usage of Petty Cash it will be easy to look at this account or review the Orders page in MarginEdge to see the number and amount of all transactions.

2.  Using the POS - Paid Outs Expensed by POS, Receipts not posted to Accounting

Another option is to have one or more buttons in the POS that are mapped in the MarginEdge sales mapping straight to one or more relevant expenses.  This makes sure any cash taken from the drawer is expensed immediately, even without a receipt.  However, if the receipt is posted through MarginEdge it is important that it *not* be posted to your accounting system or it will double book the expense.

The challenge with this method is if Paid Outs are used, and the receipt is not posted in MarginEdge, there is no “balancing account”.  The expenses would just be off between accounting and MarginEdge at the end of the month.

If Petty Cash usage is very light, this may be a simpler solution than the option above. 

3.  Avoiding the POS – Cash on Hand

A third option is to use in-store petty cash.  In this example, the store can cash a beginning balance check of say $300.  They can then use the petty cash out of the store and post the receipts marked as petty cash into MarginEdge.   MarginEdge will expense them appropriately, and the payment account should be mapped to “Petty Cash” as a Current Asset on the Balance Sheet.  When cash approaches $0 the store would write a check to Petty Cash, but would need to notify the Accountant that the check was to replenish Petty Cash in the store.   If all receipts were posted to MarginEdge, the check to replenish Petty Cash should bring the total in the Current Asset account back to the starting balance.

 

This can all be a bit confusing, we know!  So, if you want to discuss it with a live human, we'd be happy to connect you with an accounting guru in MarginEdge to help get you setup however makes the most sense for your organization.