Managing Petty Cash

Accounts Payable

Purpose

To ensure that petty cash is monitored regularly and not abused

Background

The use of petty cash is restricted to purchase of items required at short notice that cannot be acquired either through the normal ordering system within the required time.

Payments of a payroll nature (salary, allowances, leave, etc.) must be made only through the payroll system.

Scope

All staff

Procedure

Detail your petty cash procedures ensuring that:

Petty cash is kept in a safe place away from casual access
funds are adequate for Petty Cash purposes but not excessive
Petty cash is controlled by one individual (with enough seniority and experience in the company to adequately control the petty cash process)
Petty cash is reconciled periodically (usually monthly) by someone other than the custodian.
Attach the receipt to the Petty Cash Voucher and store all the vouchers locked away with the petty cash.
Cash a cheque to reimburse the petty cash when the money is low.