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Optimize Business Expenses with the Petty Cash Feature in Dynamics 365 Finance
Introduction
The petty cash feature in Dynamics 365 Finance (D365) provides businesses with an efficient way to manage small, day-to-day expenses. By utilizing this feature within the Cash and Bank Management module, organizations can create and maintain petty cash accounts, automate cash operations, and streamline approval processes. With the ability to define expense categories, maximum and minimum limits, and approval workflows, this feature ensures greater control over minor cash transactions. Additionally, it allows for seamless handling of multiple currencies and offers various inquiry and reporting tools for monitoring and auditing petty cash transactions.
Prerequisites
- First, we need to Enable ‘Petty cash’ feature in Feature management.
- Go to Cash and bank management parameters > Cash > General > Enable petty cash option to Yes
Create cash accounts
Once the petty cash feature from feature management and enable petty cash option from cash and bank management parameters is enabled, user can find Petty cash option in cash and bank management module as shown below.
- Go to Cash and bank management> Petty cash > Cash accounts.
Click NEW and give the below required fields:
- Cash- Enter a code to identify the cash account.
- Name- Enter a description of the cash account.
- Number sequence group- If the numbering of cash documents differs from the numbering that's specified in the parameters, enter a code.
- Currency- Select the default currency code for cash transactions.
- More currencies- Select this checkbox to allow currencies that differ from the accounting currency to be posted.
- Negative cash- Select this checkbox to allow negative cash balances.
Click on Save.
Click on Cash account tab > Balance limit > Balance limit.
Click on NEW and give below fields:
- Currency type- Select the type of currency:
- Accounting currency – Use local company currency code.
- Indicated currency – Use currency code that differs from local currency.
- Currency- If you select Indicated currency, select a currency code. This field is unavailable if you select accounting currency in the currency field.
- Balance limit type- Select the type of balance limit:
- Maximum – Cash balance shouldn't exceed Balance limit for cash account.
Click on Save.
Check balance limit– Select what should occur during the approval process for cash documents if the Balance limit amount for the cash account is exceeded:
- Accept – The limit can be exceeded.
- Warning – The limit can be exceeded, but the user receives a warning message.
- Error – The limit can't be exceeded, and the user receives an error message.
- Balance limit- Enter a limit for cash account balance.
Click on Save.
Cash posting profiles
- Give cash posting id and description and click on Add.
- Valid for- Select (Table or All) whether the posting profile applies to a specific cash account or all cash accounts
- Cash- If you select Table in the Valid for field, specify the cash account.
- Main account- Enter the main account to use as the summary account for the cash account.
Click on Save.
Number sequences for cash documents
- Go to Cash and bank management> Setup > Cash and bank management parameters.
- On the Number sequence tab, specify number sequence codes as shown below, references.
Default values for Cash and bank management parameters
- Go to Cash and bank management> Setup > Cash and bank management parameters
- Click on the Cash
- Here, we mention data which needs to be defaulted.
Cash– Select the default cash account in journals.
Cash posting- select the default cash posting profile.
- Check for voucher used- Select what occurs if duplicate numbers are found
- Reject duplicate
- Reject copies within fiscal year
- Accept duplicates
- Warn in case of duplicates
- Posting on earlier date- Select this checkbox to allow cash transactions to be posted before the last date of the cash transaction.
- Use confirm status- Select this checkbox to use an additional status, Confirmed, during the approval process for cash documents.
Create cash journal names in General ledger
- Go to General ledger> Journal setup > Journal names.
- Click New and give name and description.
- In Journal type select type as a Cash.
- Define other default journal parameters as needed
- click on Save
Cash operations via Slip journal
- Go to Cash and bank management> Petty cash > Slip journal.
- Click New and select journal name.
- Click on Lines on the Action pane.
- Add a line, Account type petty cash will be defaulted, select petty cash account in account field, enter amount and select offset account type (ledger, customer, vendor, project, fixed assets, bank) and respective offset account.
- Click on validate.
- After validation, click on Documents approval and click on Confirm.
- After confirmation, the approval status changes to confirmed and click on Approve.
- Once approved, the approval status changes to approved and the post button will be enabled for the post.
- Click on Post
Periodic tasks
Cash balance limit
Cash balance limit used to check the balance for selected petty cash account on specified date, the result shown in messages.
- Go to Cash and bank management > Periodic tasks > cash balance limit.
- Select “On date” and select cash account if required in filter option.
- click on OK.
- The result will be shown in messages.
Cash balance recalculation
Used to confirm that the ledger balances for cash accounts fit the cash balance
- Go to Cash and bank management > Periodic tasks > Cash balance recalculation.
- Select start date and to date.
- Click OK
Inquiries and Reports
Cash balance
- Go to Cash and bank management> Inquiries and reports > Cash balance to view the cash balance.
Cash transactions
- Go to Cash and bank management> Inquiries and reports > Cash transactions to view cash transactions. Use the Filter function to specify additional criteria to limit the selection of cash transactions.
Cash – Ledger reconciliation
- Go to Cash and bank management> Inquiries and reports > Cash reports > Cash – Ledger reconciliation.
- Here, we give required parameters and click on OK
- Report will be shown on the screen if you want to download this report click on Export and select download type.
Cash statement report
- Go to Cash and bank management > Inquiries and reports > Cash reports > Cash statement report.
- Here, we give the required parameters and click on OK
- Report will be shown on the screen if you want to download this report click on Export and select download type.
Cash transactions report
- Go to Cash and bank management > Inquiries and reports > Cash reports > Cash transactions report.
- Here, we give the required parameters and click on ok
- Report will be shown on the screen if you want to download this report click on Export and select download type.
NOTE:
- Document type is automatically picked based on the amount that you entered for the cash document.
- Cash reimbursement means - deposit money from bank to petty cash.
- Cash reimbursement means - deposit money from bank to petty cash.
- Correction means – enter negative amount Either in debit or credit field for the
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Conclusion
The petty cash feature in D365 enhances financial control by simplifying the management of small cash transactions. By enabling cash operations across multiple currencies and providing robust reporting capabilities, it supports accurate financial reporting and audit readiness. With customizable approval workflows, balance limits, and integration with other cash management processes, organizations can optimize their petty cash usage while maintaining compliance and efficiency.
We hope this blog has offered valuable insights and practical advice for your professional journey. If you found it beneficial, please consider sharing it with your network. We welcome your feedback and thoughts, so don’t hesitate to contact us directly. Thank you for reading, and we look forward to engaging with you further!
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