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.