How do I fix a petty cash deposit which has been incorrectly recorded as income?
Any Petty Cash accounts or 'tins' within ExpensePlus are treated as their own 'account' with their own balance. This balance will appear on your balance sheet as part of your cash-in-hand. Therefore the funds within Petty Cash are already part of your organisation's accounts.
When money is received into your petty cash account, either by reimbursement from an external person or cash donation, you will need to record this as Income. Prior to this receipt, the money was not part of your church accounts, and now that it has been received, it is.
Transferring money internally
If you withdraw cash from your church bank account to 'top-up' your petty cash, this needs to be recorded in the bank reconciliation as a 'Withdrawal of Petty Cash'. When you do this, an internal transfer is created and a deposit entry will be created in the petty cash account.
Similarly, if you pay in some of the cash from your petty cash account into your bank account, this needs to be recorded as a 'Deposit of Petty Cash'.
Warning: It is important that in these two scenarios, where the money has already been accounted for, any transfer between bank accounts and petty cash is shown as a 'transfer'. It is not either income or expenditure, as this would be double-counting. The petty cash reconciliation options are shown within the 'Transfer' section of the drop-down menu.
How do you correct a transaction that has been double-counted?
This could be either a deposit into petty cash shown as expenditure or a deposit into a bank account from petty cash, shown as income.
- Find the matched transaction within the statement of the bank account where the funds have been deposited or withdrawn. Click the 'unmatch' button. This will remove the entry accounting for the cash as income or expenditure.
- Rematch the transaction according to the instructions at the top of this support article - as a Petty Cash transfer instead of as Income or Expenditure.
Gift Aided Donations
If in the process of recording the petty cash deposit incorrectly, you matched it as a Named Donation in two places, you may have claimed Gift Aid on duplicate income transactions. In this situation, you can't just unmatch and correct this. Instead, please follow these steps:
- Manually upload to your bank account two transactions for the amount. For example, a paid in £125, and a paid out £125. You can do this by clicking 'upload transactions' and in the popup that appears, select the 'Upload Transactions Manually' option at the bottom of the popup. The date of these two transactions should be the date the bank deposit hits your statement (the date for which you wrongly matched the petty cash transaction as income). Adding the two transactions in this way won't affect your bank statement balance.
- Next, reconcile these two newly uploaded transactions in the following way:
- reconcile the paid in £125 uploaded as a 'deposit of petty cash' (what you should have done had it been done correctly), and this will fix your Petty Cash balance issue.
- reconcile the paid out £125 as an 'income refund' - this will create a negative income transaction i.e. reverse out the duplicate income transaction wrongly created.
- If Gift Aid has been incorrectly double claimed, you need to make a Gift Aid adjustment. When you create your next Gift Aid claim, you should use the 'Adjustment' box to correct for the Gift Aid on the £125 that has wrongly been claimed. This is applicable if you process your Gift Aid claims within ExpensePlus. A similar process also exists within the ChurchSuite system.
To help you better understand the Petty Cash module as a whole, please visit the module overview page here.