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Petty Cash Procedure

The following petty cash procedure shows to how process requests for payment through petty cash, how to replenish petty cash, and reconcile all petty cash transactions.

Process Petty Cash Requests (Petty Cash Custodian)

1. Upon receipt of a request for cash disbursement, unlock the petty cash box.
2. Verify that the applicant has submitted an expense receipt for an amount less than the maximum reimbursable dollar value, and which contains the purchase date, dollar amount, and name of the supplier.  If there is no receipt, have the applicant complete the missing receipt form, which requires an approval signature from the applicant's supervisor.
3. Enter the date, expense description, and dollar amount on the Received of Petty Cash voucher, sign it in the "Approved By" field, and have the applicant sign it in the "Received By" field.
4. Pay the requested petty cash to the applicant.
5. Staple either the receipt or the missing receipt form to the back of the Received of Petty Cash voucher and file it.

Replenish Petty Cash (Petty Cash Custodian)

1. Access a blank Petty Cash Requisition form.
2. Count all remaining petty cash and enter it in the "Ending cash on hand" field in the form.
3. Verify that the date, supplier name, expenditure description, and amount are listed on each receipt or missing receipt form and that an appropriately signed Received of Petty Cash voucher is stapled to each receipt.
4. Number all the receipts and enter each one in a separate line in the Detail of Receipts section of the form.
5. Total all receipts and enter the total in the Detail of Receipts and Reconciliation sections of the form.
6. Subtract the ending cash on hand and total receipts from the standard petty cash fund balance and enter the result in the "+/- overage/shortage" field.
7. Obtain the department manager's approval signature in the Manager Approval section of the form.
8. Attach all receipt documents to the Petty Cash Requisition form.
9. Upon receipt of the requested funds, sign the Cash Receipt Acknowledgment section of the form and give the form and attached receipts to the accounting clerk.

Record Petty Cash Transactions (Accounting Clerk)

1. Create a journal entry document summarizing the expenses listed in the Petty Cash Requisition form as well as the amount of any shortfalls or overages.  Staple the form and receipts to this journal entry and give the packet to the general ledger accountant for entry into the general ledger.

Related Topics

Bank reconciliation procedure
Cash receipts procedure 
Electronic payments procedure
Payroll processing procedure