[et_pb_section fb_built=”1″ custom_padding_last_edited=”off|desktop” _builder_version=”4.27.2″ custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” custom_padding_phone=”0px||||false|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.27.2″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” pac_dcm_carousel_specific_module_num=”0″ border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” pac_dcm_carousel_specific_module_num=”0″ global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Intro” _builder_version=”4.26.1″ header_2_font_size=”32px” custom_padding=”0px||0px||false|false” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n
Petty cash refers to the small amount of physical money that businesses keep on hand to cover their most minor expenses. Instead of using their business bank account or writing cheques for small purchases, a petty cash fund gives owners a convenient way to handle everyday business expenses. It\u2019s especially useful for covering things like office supplies, employee reimbursements, and other incidental costs.<\/p>\n
A petty cash fund is a designated pool of money set aside by a company for small business expenses. You\u2019ll find it kept in a secure spot \u2013 usually a locked box \u2013 and all petty cash should be managed<\/a> by an employee who is responsible for disbursing funds, collecting receipts, and keeping good records of how the money is going in and out of the fund.<\/p>\n Many small businesses establish what\u2019s called a petty cash float, which is the total amount of cash allocated to the fund. As cash is used, the balance decreases and receipts are collected to account for each expense. When the remaining balance reaches a low threshold, the fund is replenished by withdrawing more cash from the business bank account.<\/p>\n To set up a petty cash fund, your business will withdraw a fixed amount from your bank account and record it as a petty cash account in the general ledger. Employees can then use the fund for minor expenditures (e.g. office supplies, birthday cards, employee reimbursements, etc).<\/p>\n Each transaction must be documented<\/a> with petty cash receipts and recorded in a log or accounting software. When the petty cash balance runs low, the receipts are reviewed and more cash is withdrawn from the bank to restore the fund to its original amount.<\/p>\n Whoever you\u2019ve appointed to manage petty cash must make sure that money is always available for small business essentials.<\/p>\n The best way to manage petty cash funds is to choose a custodian (i.e. a reliable employee) who is responsible for overseeing the fund and tracking expenses. All petty cash transactions should come with receipts, which should be stored and reviewed every few months to avoid mistakes or stolen funds.<\/p>\n Record keeping via a petty cash log will help track expenses related to the fund, the remaining balance and when it might need topping up. Setting a spending limit per transaction means the fund will only be used for small expenses.<\/p>\n <\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/www.reckon.com\/au\/wp-content\/uploads\/2025\/02\/Recording-petty-cash-transactions-2.png” alt=”Petty cash process” title_text=”Recording Petty Cash Transactions 2″ _builder_version=”4.26.1″ _module_preset=”default” custom_margin=”-50px|-30px|||false|false” custom_padding=”0px|||||” global_colors_info=”{}”][\/et_pb_image][et_pb_text _builder_version=”4.26.1″ _module_preset=”default” global_colors_info=”{}”]<\/p>\n Petty cash transactions should be recorded in the general ledger for financial reporting purposes. Here\u2019s how it works:<\/p>\n Bottom line: petty cash is a practical way for businesses to cover minor expenses without the need for formal payment processes.<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Related terms” _builder_version=”4.26.1″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” locked=”off” global_colors_info=”{}”]<\/p>\n See related terms<\/strong> <\/p>\n [\/et_pb_text][ba_social_share icon_bg=”#03002e” icon_padding=”10px|12px|10px|12px|true|true” layout=”classic” show_text=”off” btn_padding=”0px|0px|0px|0px|false|false” btn_bg_color=”RGBA(255,255,255,0)” _builder_version=”4.23″ _module_preset=”default” custom_margin=”50px||||false|false” custom_padding=”25px||||false|false” custom_css_before=” content: %22SHARE THIS%22;|| font-size: 16px;|| font-weight: 700;|| line-height: 22px;|| letter-spacing: 0em;|| text-align: center;|| color: #ff5447;|| margin-bottom: 10px;|| display: inline-flex;|| position: absolute;|| margin-top: 10px;” border_width_top_main=”1px” border_color_top_main=”#e4e4e4″ border_radii_icon=”on|5px|5px|5px|5px” global_colors_info=”{}” custom_css_before_last_edited=”off|desktop”][ba_social_share_child _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”facebook” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”linkedin” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][ba_social_share_child network_type=”email” _builder_version=”4.23″ _module_preset=”default” global_colors_info=”{}”][\/ba_social_share_child][\/ba_social_share][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" Petty cash refers to the small amount of physical money that businesses keep on hand to cover their most minor expenses. Instead of using their business bank account or writing cheques for small purchases, a petty cash fund gives owners a convenient way to handle everyday business expenses. It\u2019s especially useful for covering things like […]<\/p>\n","protected":false},"author":35,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"class_list":["post-289168","glo","type-glo","status-publish","format-standard","hentry"],"yoast_head":"\nHow petty cash works<\/h2>\n
Common types of petty cash expenses<\/h2>\n
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Petty cash rules and best practices<\/h2>\n
How to record petty cash transactions<\/h2>\n
\n
What is credit?<\/a>
What is an expense?<\/a>
What is overhead?<\/a><\/p>\n