Handling petty cash is challenging especially when the volume is high. It covers minor expenses, from office supplies to repairs and delivery payments. However, petty cash management can be time-consuming and error-prone if not managed properly. Many businesses still rely on conventional manual methods often leading to inaccuracies and increasing the chances of fraud.
No wonder that many large enterprises are adopting petty cash management software to automate these often-neglected processes. This shift is helping companies gain improved accuracy, better control, and considerable time savings. Here’s why your business should consider handling petty cash with a digitized system with automated payments through UPI facility, especially if you are located across multiple locations.
Challenges of Traditional Petty Cash Management
Handling petty cash manually OR using prepaid cards has long been the norm for many companies. While these systems work, the absence of petty cash management software with UPI payment facility
poses many limitations.
Time Consuming
It is a no-brainer that feeding entries manually to handle petty cash is time-consuming. Your finance team can invest the same time in more productive and strategic jobs.
Prone to Errors
Petty cash managed manually is also prone to errors. Employees may forget to record expenses or make calculation mistakes, leading to inaccurate records. These small mistakes can add up, resulting in an inaccurate financial picture and potential compliance issues.
Low Visibility
You can only save what you can see. Handling petty cash through traditional means offers limited real-time visibility into your expenses. This raises potential misuse, misallocation of funds, and difficulty in identifying where the money is going.
Poor Reporting and Reconciliation
Without a digital system in place, compiling reports can be cumbersome. One has to cross-check paper receipts for reconciliation. Manual data entry can cause error-prone and delayed reporting. This affects the decision-making at all levels from top to bottom.
Auditing Difficulties
The lack of petty cash management software makes audits harder. Traditional petty cash management requires manual reconciliation, and any missing funds or discrepancies are challenging to trace without clear documentation. This is even more difficult when you work in a larger set-up with multiple locations or branches.
Blocking of Cashflow
In the earlier automated way of handling through petty cash using prepaid cards also involves blocking cashflow and then recovery of the loaded funds when there is turnover of people.
KYC Issues
KYC involved in prepaid cards is also time consuming especially when it involves high turnover of employees.
Advantages of Petty Cash Management Software with UPI facility
As we have seen, handling petty cash manually can cost you dearly. Petty cash management software with UPI payment facility addresses the above issues by automating and streamlining the entire process, from start to finish. Here are the key benefits that your business can enjoy
Automation and Real-Time Tracking
One of the main advantages of petty cash management software is automation. Expenses are tracked in real-time, allowing employees to record transactions instantly and accurately. This eliminates the need for manual entries, reduces human error, and makes reconciliation much faster and more efficient.
Prevents Cash Leakage
Imagine you spent all Rs. 100 in your fund. However, you can’t account for 20% due to multiple reasons, like unorganized receipts or manual entry. This is a leakage in your petty cash. A digitized solution helps you prevent this by ensuring expenses are tracked and accounted for.
Pre-spend Checks
We have often heard people saying “Don’t cry over spilt milk”. Similarly, it makes little sense to cry over an expense that has already taken place. Handling petty cash manually can put you in such a spot. A good petty cash management software like the petty cash management solution by Zaggle Zoyer, allows you to pre-check your spending before it takes place. You can integrate your policies to prevent any out-of-policy spending before it takes place.
Higher Control and Transparency
Petty cash management software provides increased control and transparency by creating an auditable digital trail for every transaction. Managers can monitor all petty cash activities in one place, helping prevent misuse of funds.
Greater Visibility
What are the chances of saving money when you don’t know where it is getting spent? Almost nil. You must get full visibility into your petty cash spending to identify areas of overspending or out-of-policy spending. A digitized system allows you to track every expense and offers you full visibility to help you control all unwanted spending. Another important factor is that advanced level petty cash management software like Zaggle Zoyer allow you to pay using QR codes. This helps in preventing untracked cash payments and every expense gets reflected directly in the dashboard offering full visibility into spends.
Improved Accuracy and Reduced Errors
The chances of errors are much higher when you manually handle petty cash on spreadsheets than when using a digitized solution. A robust software significantly reduces the chances of errors by automatically calculating totals and balancing cash flow. This leads to more accurate financial records, better financial management, and compliance with tax regulations.
Faster Reporting and MIS Integration
Many petty cash management software solutions integrate seamlessly with accounting and ERP systems, providing a complete and up-to-date view of a company’s financial position. This quick access to data improves MIS reporting and supports better-informed decision-making.
Simplified Auditing and Compliance
Audits can become a nightmare when the systems are disparate and the processes are human-dependent. Handling petty cash manually can take a toll on you. Digital logs on the other hand make it easier to trace each expense, ensuring compliance. Auditors can quickly access records, saving both time and resources during audits.
Actionable Insights
However, time-consuming it may be, you can manually enter as much data as you want. However, it is not just data that matters but insights from analysis from that data are what the top management looks for. A digitized system offers you actionable insights using which you can make timely and appropriate decisions.
No cashflow blocking with company pool account
Don’t load money to individual accounts / prepaid cards and block your cashflow, instead, load money monthly / quarterly to company pool account from where employees can spend using UPI payments real-time.
No KYC process
Automated software with UPI payments does not involve KYC of employees since it avoids loading money to individual account / prepaid cards.
Conclusion
Efficiency and accuracy are critical in the world of finance. Handling petty cash manually is not only outdated but also comes with significant risks and inefficiencies. Petty cash management software is a powerful solution that automates and streamlines the entire process, offering your business real-time visibility, improved control, and reduced errors.
The right solution can help you make timely and well-informed decisions leading to higher accuracy, better financial planning, and cost savings. The petty cash management solution by Zaggle Zoyer is one of the leading solutions that you can consider. It helps you prevent cash leakages, save time, gain tighter control, and improve overall efficiency.
Contact us to learn more about how you can prevent fraud by digitizing petty cash management and ensure compliance.
