To reconcile petty cash in QuickBooks, count the cash in the box, add up the vouchers for what was spent, and compare the cash count with the Petty Cash account's balance. Then open Reconcile for that account, enter the counted cash as the ending balance, and tick each expense the vouchers support. The difference should be zero.
Setting up a petty cash account in QuickBooks Online
Petty cash gets its own account in QuickBooks Online, set up as a bank account so it can be reconciled. In the Chart of accounts, create a new account with the type Bank and the detail type Cash on hand, and name it Petty Cash. Leave the opening balance blank unless the box already holds cash.
Intuit's article Set up and use petty cash in QuickBooks Online gives the steps:
- Go to Settings and select Chart of accounts.
- Select New.
- Choose Bank as the account type and Cash on hand as the detail type.
- Name it Petty Cash.
- If cash is already in the box, enter the amount and an as-of date in the starting date and opening balance field. Otherwise leave it blank.
- Select Save.
Leave the opening balance blank if you will fund the box from checking. A balance typed here and a funding check later would count the same cash twice.
Funding the QuickBooks petty cash float by check or transfer
The float is the fixed amount the box should hold, say 300.00. You fund it by taking cash from checking and recording that move in QuickBooks. If you wrote a check for the cash, record a check with Petty Cash as the payee. If you withdrew it without a check, record a transfer from checking to Petty Cash.
Intuit's article says this funding entry creates the opening balance. Either way, checking goes down and Petty Cash goes up by the same amount, and no expense is recorded yet. Spending is recorded later, slip by slip.
Keep the cash in a locked box and name one person to look after it. Intuit's article recommends a single custodian who tracks every withdrawal. When two people share a box, a shortage has no owner.
Recording petty cash spending in QuickBooks from vouchers
Each time cash leaves the box, the custodian writes a slip, often called a voucher, with the date, the person paid, the amount and the purpose. Attach the receipt to it. In QuickBooks, record each voucher as an expense with Petty Cash as the payment account and the right category.
Intuit's article says the slips plus the cash left in the box should always equal the amount put in. That is the test the reconciliation runs.
Record vouchers often, weekly if the box is busy. A month of slips entered at once invites mistakes, and a missing receipt is easier to chase after a week than after a month.
How do you reconcile petty cash in QuickBooks without a bank statement?
The cash count is the statement. Count the box on the last day of the period and use that figure as the ending balance on the Reconcile screen. Tick each petty cash expense that has a voucher, and the funding entries. If the difference reaches zero, the books, the vouchers and the cash agree.
The steps follow Intuit's article on how to reconcile an account in QuickBooks Online:
- Open Accounting, then Reconcile, and choose the Petty Cash account.
- Enter the counted cash as the ending balance and the count date as the ending date.
- Select Start reconciling.
- Tick each expense supported by a voucher, and the funding entries.
- When the Difference shows 0.00, select Finish now.
Intuit's petty cash article recommends reconciling the account regularly. Once transactions are reconciled, the slips can move to long-term storage. A loan account works the same way, with the lender's statement as the anchor instead of a cash count; reconciling a loan in QuickBooks covers it. If this is the first time anyone has reconciled the account, the first QuickBooks Online reconciliation explains how to choose a starting point.
A worked month
The figures below are an example for a 300.00 float.
| Item | Amount |
|---|---|
| Float funded by check on Sept 1 | 300.00 |
| Voucher: postage, Sept 4 | 23.40 |
| Voucher: office supplies, Sept 11 | 61.85 |
| Voucher: courier, Sept 19 | 38.00 |
| Voucher: team lunch, Sept 26 | 92.50 |
| Total vouchers | 215.75 |
| Expected cash (300.00 less 215.75) | 84.25 |
| Cash counted on Sept 30 | 84.25 |
You enter 84.25 as the ending balance, tick the four expenses and the funding check, and the difference is zero.
Replenishing the QuickBooks petty cash float back to its fixed amount
Replenishing tops the box back up to its fixed float. The top-up equals what was spent, which is the total of the vouchers. In the example, a check for 215.75 brings the box from 84.25 back to 300.00. Record it the same way as the first funding: a check to Petty Cash, or a transfer.
Intuit's article does not set out a separate replenishment step, so treat the top-up as a repeat of the funding entry. The expenses are already recorded from the vouchers, so the top-up only moves cash from checking into Petty Cash.
Replenish after you reconcile, not before. The reconciliation proves what was spent, and the top-up check should match that proven figure. A top-up for a round 200.00 because the box "looks low" breaks the link between vouchers and cash.
Companies with many floats across sites often outgrow this approach and move to an ERP. The NetSuite bank reconciliation guide covers reconciling cash in that system.
Why does the QuickBooks petty cash balance drift from the cash box?
A petty cash balance drifts when the books and the box record different things. A voucher never entered, an expense recorded twice, a top-up entered as an expense, or cash that simply went missing all open a gap. The size of the gap, and whether it is over or short, points to the cause.
Work through the likely causes. Here "short" means the counted cash is below the QuickBooks balance, and "over" means it is above:
- Short by one purchase. Cash was spent without a slip, or a slip was lost, so the expense never reached QuickBooks.
- Over by one voucher's amount. A voucher was entered twice in QuickBooks, so the books show less cash than the box holds.
- Over by the top-up amount. The replenishment check was recorded as an expense instead of a transfer to Petty Cash.
- Short by an odd amount. Change given wrongly, or cash taken. Record the shortage to a cash over and short account, and tell whoever manages the custodian.
Fix each error with a dated entry in the current period, and note what you found. Do not carry an unexplained shortage from month to month. Small differences left open become a pile nobody can explain, the problem covered in cleaning up old reconciling items.
For firms that review client cash, PreciseBankFlow checks the bank side: each checking statement foots, and each petty cash top-up check can be matched to the ledger. It is opening to firms in small groups; request a spot.