PETTY CASH SYSTEM

What is Petty Cash?

•Petty Cash or Imprest Cash is a small amount

of cash kept on hand to cover expenses that

are too small to bother writing a check.
Is it important to have a Petty Cash Fund?

• It is important to have petty cash so that the employees

or managers do not have to make expense from their

pockets and any urgent needs can be handled with ease.
How it affects expenses
• Petty cash is a current asset account; it is a part of a company’s cash. A petty
cash fund is established by cashing a check drawn on the company’s regular
checking account and giving the currency and coins to the petty cash
custodian.

• If expenses are paid with money in the petty cash fund, the currency and
coins held by the petty cash custodian will decrease and in place of that
money the custodian will have petty cash receipts or petty cash voucher.
Setting up and Managing Petty Cash Fund
• Start a petty cash fund by writing a check drawn on your
company to “Petty Cash”
• Cash the check
• Designate the petty cash in a drawer, box, or a safe
• Have two people access to the petty cash fund
• Make a list of expenditure from the petty cash account
• Replenish the petty cash fund back to the approved amount as
needed