Petty Cash The best way to deal with Petty Cash is to set it up as a separate bank account, and then use the Bank Transfers when money is transferred from the bank account to the petty cash account, and use the Spend Money and the Receive Money for payments of petty cash and for receipts directly into petty cash from (for example) patients paying for their own reports. So to set up the Petty Cash Account Go to Settings – Chart of Accounts – Add Bank Account and name this your Petty Cash Account, and when it asks for sort code and account number, just enter a series of zeros.

Click Save For Petty Cash drawn out of the bank – this will be shown as a payment when the bank transactions appear in your bank account.

When you are reconciling the bank account, click on the transfer tab.

When selecting a bank account, choose Petty Cash – and give it a reference. Click OK and all is done. Now – an introduction to the Spend Money and Receive Money Options: This is how to deal with payments from petty cash, and also receipts from petty cash that may have come direct from patients or other sources, rather than a withdrawal from the bank Look at the dashboard – and the new Petty Cash Account account – in the right corner you will see the word Manage. Click Manage. In the middle column you will see Spend Money and Receive Money Options. To record the spending of your petty cash, click on the Spend Money and fill in the details as before and click save

Now you will notice something odd – if you go back to the dashboard, you will notice there is a difference between the petty cash Balance in Xero which accepts the payment, and the Statement Balance which does not. If you use the Spend Money and Receive Money options you will need to manually effect the reconciliation:

To do this – go to Manage Account – Reconcile Account – Account Transactions. You will see your transaction in orange marked Unreconciled.

Click on anything on that line to bring up the transaction, and you will see Options on the right. Click it

Choose Mark as Reconciled, and the transaction is cleared into the Statement Balance