How do I record a cash advance?

You may wish to give a "cash advance" to a member of your team so that they can make cash purchases with your organisation's money for an upcoming project. This help guide article will explain how you can record this in ExpensePlus using a new Petty Cash account.

Step 1: Set up a new Petty Cash account for your cash advance

To do this, head to your system settings screen and choose Bank, Petty Cash & Payment Processor Accounts, then under Petty Cash accounts, choose Add Petty Cash Account. In the pop-up that appears, give your new Petty Cash account a clear and unique name, and add access for any ExpensePlus users who will need it.

Click Submit to create your new Petty Cash account. You'll now see it listed in the Petty Cash module in ExpensePlus.

Step 2: Transfer money into your new Petty Cash account

Before you can record any expenditure, you need to transfer some cash into your new Petty Cash account. If you are depositing money into the team member's bank account, this will be via bank transfer (option 1). If you are giving them cash, you'll either withdraw this from your bank account (option 2) or take it from an existing Petty Cash account (option 3). You should only choose one of the options below.

Option 1: bank transfer to team member OR option 2: cash withdrawal from bank account

If you have sent a bank transfer to your team member OR withdrawn cash from your bank account to give to the team member, code this in the Bank Matching screen as a Withdrawal of Petty Cash and select your new Petty Cash account (made in step 1) under the Transaction Details section.

Option 3: withdrawing from another Petty Cash account

If you have taken cash from another Petty Cash account, you need to code a Transfer between Petty Cash accounts. This is done in the Petty Cash module.

Whichever option you have chosen, your new Petty Cash account (in this example, named "Cash advance - Bake Sale ingredients") will now have an opening balance against which expenditure can be recorded.

Step 3: Record purchases made from the cash advance

Now you need to code any expenditure made from this cash advance. You do this inside the Petty Cash module in ExpensePlus: How do I submit a payment request to Petty Cash?

At any time, you can see the purchases made and remaining balance in the Petty Cash screen for that account. Need a top up? That's no problem - just repeat step 2 as needed.

Step 4: Transfer any residual balance from the cash advance after the project has ended

Once the project has been completed, there will likely be a residual balance in the cash advance which needs to be deposited back into your main bank account, or wherever the initial cash advance came from. You should only choose one of the options below.

Option 1: bank transfer from team member

If your team member returns the residual sum by bank transfer, you should record this as a Deposit of Petty Cash and then choose your Petty Cash account from the list which appears.

Option 2: bank deposit of remaining funds

If your team member hands back cash which you wish to deposit, you can do this via the Bank Deposit screen and code as Plus Cash Added from Petty Cash / Till System.

You will then need to bank match this bank deposit when you subsequently upload your bank statement.

Option 3: depositing into another Petty Cash account

If you have a small amount of residual cash which you wish to deposit into another Petty Cash account, you can code a Transfer between Petty Cash accounts. This is done in the Petty Cash module and the process is shown above in step 2.

Step 5: Close the Petty Cash account (next financial year)

After the financial year has closed, you will be able to close the Petty Cash account in the Bank, Petty Cash & Payment Processor Accounts settings screen.

How is this different from recording Petty Cash expenditure as usual?

Petty Cash expenditure should be recorded when the purchase has already been made. If this is the case for your project, record expenditure in your petty cash module as usual. The process we've outlined in this article covers the situation where you'd like to give a team member cash for purchase(s) before the purchase(s) have been made.