Petty Cash
Whether it is common knowledge or not, Petty Cash is the operational funding of most warehousing operations. It is essentially money set aside for the purpose of meeting expenses and replenishing stock on hand. Whether it is inventory or stock replenishment, you cannot run a warehousing operation without having it in tact. It serves as a source of keeping raw material on hand to meet production requirements when they are highest, it acts as a reserve fund for the storage and offloading of finished goods during peak seasonal seasons, and it acts as a safety net in case of sudden inventory additions or liquidations.
So how do you keep your petty cash on hand? It is imperative that you have at least one petty cash drawer in each department. This may sound like a lot of inventory to keep track of, but you will be surprised how easy it is. Simply divide your product categories (purchase items/sales, stock replenishment/repurchase items/replaces) into their smallest units and place the cash in each respective slot. If your company routinely buys X amount of a certain product category per month, you can fill your inventory slot by purchasing X amount of the product every month (and then placing a check mark next to the slot to indicate that you have inventory and would like to place an order for X amount of your product if possible).
Another great use for your petty cash checking account is to request funds from your supply chain management system when your current inventory or stock levels fall below a preset level. By using your receivables management software, you can specify which customers should receive a particular amount, how frequently these customers can access their inventory from your company, what stipulations must be met in order for you to receive these funds, and so much more. Requesting funds through your supply chain management system is fast, simple, and easy for your business needs. You will soon see how your business can grow by simply requesting small amounts of petty cash every month!
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