Petty cash fund

A petty cash fund is a small amount of bills and coins that an organization keeps on the premises to pay for minor expenditures. There may be a petty cash fund in each major department of a company. A petty cash custodian is responsible for this fund, and maintains an up-to-date reconciliation of the amount of bills and coins remaining in the fund. The fund is typically replenished by the accounting department once a month. Examples of the items that may be paid for from the petty cash fund are:

  • Flowers
  • Food
  • Office postage
  • Presents
  • Supplies
  • Taxi charges

Petty cash funds are subject to theft, and so are commonly being replaced by corporate credit cards and employee expense report reimbursement systems.

Related Courses

Bookkeeping Guidebook 
Corporate Cash Management 
How to Audit Cash 
Optimal Accounting for Cash