nnPETTY CASH OR PLASTICnWhich is right for your business?

The need for small businesses to pay for occasional expenses is never going to go away and petty cash has traditionally been the way to do it. While it is immediate, easy, and you only stand to lose what you give out, the unfortunate truth is that there are risks inherent to using petty cash to fund employee purchases.u00a0

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There is a high risk of error or discrepancies in the process and reimbursement of petty cash due to miscounting or mathematical errors.

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Paperwork such as approving purchases, tabulating receipts, and replenishing the account takes time.

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There is always a risk of theft when cash is involved.u00a0 The only way to completely avoid this to eliminate petty cash altogether.

Alternatives to Petty Cash

Business credit cards u2013 Business credit cards are less time consuming and less susceptible to theft or loss.

  • Simplifies online purchasing
  • Many cards offer rewards programs
  • No fees if you pay balances monthly
  • Employers can set spending limits for each employee
  • If you can qualify for a business card, it can help build credit
  • Provides a financial cushion when accounts receivables are behind or sales are slow

Prepaid Debit Cards – With prepaid cards, you have complete, real-time control over employee spending.u00a0

  • Monthly fees may apply
  • The risk of human error is zero
  • There are no credit barriers to signing up
  • Reloadable from your account dashboard
  • Know exactly how much is being spent, where, and by whom in real-time
  • Do away with the need for receipts, expense claims, and reimbursement of petty cash

Running a business is full of small decisions, each of which has costs, be it time, money, or risk.u00a0 Petty cash, business credit cards, and prepaid debit cards all come with their own pros and cons.u00a0 u00a0Only you can decide which is the best choice for your company.u00a0u00a0

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