Petty Cash

What is Petty Cash?

Petty Cash is a small fund of money that is kept on hand to cover minor expenditures that are not practical to pay by check or credit. This fund is often used for miscellaneous expenses such as office supplies or small employee reimbursements where using checks or electronic payments would be unnecessary or inefficient.

Short Description: A small amount of cash kept on hand for minor or incidental expenses.

• Replenishment: The fund is periodically replenished to maintain a set balance, with receipts accounting for all cash spent.
• Control: It is typically managed by a custodian who is responsible for its safekeeping and accounting.
• Limitations: There are usually constraints on how much can be spent on a single transaction and specific categories that qualify for petty cash usage.

This system allows for quick and easy payment of small expenses, helping maintain the efficiency of day-to-day operations without burdening the primary finance systems.