If you plan on using petty cash in Xero, here’s a shortcut.

• Create a bank account in Xero called Petty Cash. The bank and account number would be called “Petty Cash”.
  
• You’ll need to put funds into the petty cash account and you can do that by transferring funds from one bank account to Petty Cash (in bank account) or enter the opening balance in your conversion balances (general settings).
  
• Record transactions in the petty cash account using spend money or receive month transactions.
  
• Click on the transaction and then mark “Reconciled” on the transaction to reconcile it.