Every business has small day-to-day expenses — postage, refreshments, minor supplies — that are inconvenient to pay by cheque or transfer. Petty cash handles these, and the imprest system keeps it controlled.
This guide explains petty cash and how to manage it.
What is petty cash?
Under the imprest system, a fixed float is given to a petty cashier, who spends and records small expenses. Periodically, the amount spent is reimbursed to restore the float to its original level.
A petty cash book records each small payment with a voucher.
Frequently asked questions
What is the imprest system?
A method where a fixed petty cash float is periodically topped up by exactly the amount spent, keeping the float constant.
Why keep petty cash separate?
To control and track small expenses without cluttering the main cash or bank records.