Cash is really important for a business to survive. It's used for things like paying for stuff, getting more stuff, keeping track of how much money is coming in and going out, and making the business successful. Cash flow tells us how healthy a business is, whether it's big or small. Sometimes businesses struggle to do basic things like paying suppliers, buying materials, and paying their employees if they don't have enough money coming in.
To make things easier, we can use petty cash process flow charts. These charts help us manage our money better and keep things running smoothly. This article will teach you how to make a useful petty cash flowchart to keep track of your daily financial activities.
In this article
Part I: What Is a Petty Cash Flowchart?
Petty cash is a small amount of money that a company keeps on hand for little expenses like buying office supplies or reimbursing employees. It's usually stored in a secure place like a drawer or box. Petty cash can also be used for things like snacks for the office or small celebrations. The company keeps track of these expenses and replaces the petty cash regularly. This information is recorded in the financial statements or general ledger. In bigger companies, each department might have its own petty cash fund.
With that in mind, a petty cash flowchart is a picture or diagram that shows how money comes in and goes out of the petty cash. It helps the company keep track of these small transactions easily. Petty cash process flow charts make it simple to see where the money is going, even for the smallest expenses.
Benefits of Petty Cash Flowcharts
Using a petty cash flow diagram for your company's small expenses can bring you several benefits, such as:
- The flow diagram helps you see how you spend money and manage it more effectively.
- It allows you to keep track of recent expenses, so you know where the money is going.
- The flow chart encourages office staff to be responsible with the company's money and not spend it on unnecessary things.
- t helps with cash replacement by providing a clear record of what needs to be replenished.
- In case of emergencies, everyone can refer to the flowchart to understand how petty cash is used.
- Flow diagrams are easy to understand, and by mentioning the date and time, you can keep track of every small transaction.
Part II: Design Petty Cash Flowcharts More Innovatively with EdrawMax!
Business cash flow and procurement strategies can change over time, which makes it tedious to create a petty cash process flow chart from scratch every time. Starting with a blank drawing can leave you feeling lost and unsure where to begin. To solve this problem, you can use a pre-designed template that already has a professional look. However, there are not many diagramming platforms that offer a library of templates to meet your needs.
To overcome this challenge, you can use a modern diagramming solution like EdrawMax. It has a wide range of templates and customization options that will never disappoint you. Its easy-to-use interface, symbols libraries, unlimited canvas, quick menu bars, and customization choices leave users amazed. Not only can you create flowcharts, but you can also collaborate with others to improve productivity.
Examples of Petty Cash Flowchart Templates
EdrawMax lets you share your creations with others through its Templates community. This means you can publish your artwork and let people view, access, edit, and share your diagrams easily.
To make it even more convenient for you, we have carefully selected some amazing petty cash flowchart templates from the EdrawMax Templates Community. These templates will give you a clear idea of how to create your own flowcharts for petty cash management.
Petty Cash Flowchart Template
The above petty cash flowchart shows how a company manages its petty cash expenses. It starts when the office runs out of petty cash, and the office manager requests more from a Certified Wealth Strategist (CSW). The CSW sets rules for spending petty cash, like needing approval for expenses over $50.
First, the CSW creates a requisition form and sends it to the Service Coordinator for approval. The coordinator checks the CSW's information in the receipt book and approves the payment. The CSW signs the receipt book as proof. Then, the CSW either uses the money for buying things or brings it to the office. But they have to show the receipt for what they bought to the Senior Coordinator if there are any changes.
If the receipt is lost, the CSW must fill out a form and give it to the Justice of the Peace. Also, if the Service Coordinator is not there and the office needs cash urgently, the CSW can provide the funds to the office staff.
Petty Cash Process Flow Chart Template
Regular petty cash reconciliation is important to make sure there's enough money in the fund for unexpected needs. To reconcile petty cash, a Purchase Order or requisition order is created and sent to the main office for processing.
In the example flowchart above, an invoice or Purchase order is prepared, and the documents are checked. The Finance Manager looks at the documents and sends them to the Chief Financial Officer for approval of the petty cash payment. If the documentation is not complete, the records are sent to the AP Payable Executive. They complete the documents and send them back to the Finance Manager for verification.
Petty Cash Flow Procedural Diagram Template
The flowchart above shows how petty cash reconciliation works. When there's not much money left in the petty cash, the secretary prepares a purchase order (PO) with details about the transaction, items bought, and total expenses.
If the balance is low due to general expenses, the secretary can request a petty cash reconciliation and list the amount spent on different things. The PO, along with the money and receipts, is sent to the business office for reconciliation.
Next, the business office follows its own steps to process the request. They receive the PO and receipts from the secretary. Office staff check the receipts and write a check for the petty cash amount. The secretary then gets the cash in a separate bag to replenish the petty cash fund.
Part III: How To Design A Petty Cash Process Flow Chart Using EdrawMax?
EdrawMax Templates Community has many helpful and well-designed templates for petty cash process flow charts. You can choose any template that suits your needs to create your own petty cash flowchart. We will guide you through the step-by-step process of making a petty cash flowchart using a pre-made template in EdrawMax. Let's begin!
Download and run the "EdrawMax" software on your device to create a petty cash flowchart.
Click the "Templates" option in the left pane, which will launch the "Templates Community"; type "Petty Cash Flowchart" in the search bar, and discover your preferred template from the search results.
After opening an appropriate template, add or remove certain shapes to modify the diagram's structure according to your requirements.
Now, edit the flow diagram's data to add your custom information to it; to do so, double-click a shape, and insert your customized text. You can also add text anywhere on the canvas by double-clicking on that space.
You can also insert images, clipart, icons, hyperlinks, tables, charts, and other multimedia in your petty cash flowchart to make it ultra-expressive; for this, navigate to the "Insert" tab in the menu.
When you finish editing all the shapes' data, customize your petty cash flowchart's appearance; for this, navigate to the "Design" option in the menu bar, and set your favorite theme, color combination, font, connector style, background, and other features.
To export your petty cash process flow chart, click the "Export" option at the top bar and choose your desired export format.
Managing cash is crucial for any business and can determine its success. Even small cash transactions, known as petty cash, are important for understanding a company's financial situation. To keep track of these minor expenses, creating a petty cash process flow chart can be helpful. It allows you to visualize and record things like buying office supplies, organizing employee meals, or reimbursing expenses. In this article, we have provided excellent templates for petty cash flowcharts to guide you in creating your own chart that suits your needs.