The Petty Cash Module is tightly integrated with Expenses and Reimbursements. Whenever you pay in cash, the system automatically deducts from petty cash and creates a debit entry. This removes the need for manual updates and keeps records consistent. Petty Cash and the Expense module are auto-linked — every time you pay in cash, the system records it, deducts the balance, and keeps audit consistency.
🛠 Prerequisites
- At least one credit balance must exist in petty cash.
- Expenses / Reimbursements recorded in the Expense Module.
🔗 How Does Petty Cash Auto-Link with Expenses?
1️⃣ Expense Paid by Cash
- Create an expense in the Expense Module (see article: Creating a New Expense Record).
- Select Payment Mode = Cash.
- ✅ System automatically:
- Creates a debit entry in Petty Cash equal to the Total Amount Payable.
- Reduces the petty cash balance by the payable amount.
2️⃣ Reimbursements Paid by Cash
- Record the reimbursement (auto-generated from an Expense marked Is Reimbursement).
- When marked paid by cash →
- ✅ Petty Cash debit entry auto-created.
- ✅ Balance reduced by the reimbursement paid amount.
3️⃣ What Does NOT Affect Petty Cash
- Bank Charges expenses created from a Payment with “Borne by = We” do not touch Petty Cash — they post to the Bank account, not cash. (See Multicurrency / Transaction Fees for the polarity rule.)
- Expenses paid via Bank, UPI, or Cheque never create a Petty Cash debit.
⚠️ System Rules
- If you later change the paid amount on the Expense / Reimbursement → ❌ the Petty Cash record does not auto-update (one-way sync, by design, to avoid silent mismatches).
- Cancelling an Expense linked to a Petty Cash debit does reverse the debit.
- If you edit a Credit record in Petty Cash → ✅ the balance recalculates in real time.
⭐ Important
- Always finalize the payable amount before marking an expense as paid by cash.
- Petty Cash updates are one-way sync from Expense → Petty Cash.
- Use the Expense ID column on the Petty Cash grid to trace any debit back to its source.