Petty cash. Employees are using petty cash funds to get mileage reimb. for $ that is due to them.

Question

How do I convince employees that it is not proper accounting to use petty cash for mileage reimbursement. These employees are entitled for reimbursement, but I need to explain that they can't get this reimb. through the petty cash fund that they maintain.

Answer 1

Unless you are prepared to cut checks and cash them on the spot you should tolerate the practice -- with slight modifications.

I suggest that you provide mileage, toll and parking reimbursement forms to the employees and, when accompanied by receipts, pay them on the spot from cash on hand.  In effect keep two accounts (although you only need one cash drawer) one for petty cash and one to mileage, tolls and parking.

Tell the employees who use an automated toll system such as EZ-Pass that they will be reimbursed for those tolls when they present a copy of the their credit card bills with the appropriate entry(s) highlighted.

Hope this helps

Jerry-the-bookkeeper

Answer 2

I assume your company has some kind of employee expense form that they should use for milage and other travel and entertainment expenses.  Send a memo indicating that travel and entertainment expenses must be processed on the employee expense form and not put thru petty cash.

It would probably be a good time to define what things can be ran thru petty cash.  And indicate that petty cash won't be reimbursed for travel and entertainment expenses anymore.