What is petty cash, is it just cash?
It is cash funds held at the business premises.
Pretty cash is mainly used to make small purchases and for reimbursement to staff.
An amount taken from the business bank account and held on site.
A Petty Cash Receipt and accompanying receipts are put in place of any funds issued.
The sum of cash and receipts together should always amount to the agreed petty cash fund.
When the fund gets low the transactions will be entered into the accounts and further funds issued.
The amount of petty cash fund will be different for each business depending on it’s requirements.
Some businesses deal mainly with cash payments and so a cash float will be required.
Others use only electronic payment methods so would not require a petty cash fund.
Keeping an eye on the petty cash is essential to make sure receipts are recorded and the balance is maintained.