Every business has a number of different accounts for varying uses. These include capital purchases, such as equipment or vehicles, operating accounts for utilities and other needs, and payroll in order to pay the staff. A frequently overlooked account is petty cash "" a small, cash-only account that must be managed carefully in order to avoid fraud or abuse.Petty cash is defined as a small
. discretionary account that is used for payment of expenses that do not justify the issue of a check. These expenses include one-time-only purchases such as taxicab fares, food purchases for office events, and small amounts of office supplies. The petty cash is typically kept in a locked box and is maintained by the receptionist or office manager.Even though the amounts of any given petty cash purchase tend to be small "" under $100 "" it is still important that they be properly documented. The most common method requires the buyer to submit a receipt and be reimbursed from the petty cash fund. The keeper of the fund records the expense on a petty cash form and attaches the receipt or invoice for processing.These petty cash forms are very simple in nature, a sheet of paper divided into columns with space for the date, amount, purpose and name of the person doing the buying. This form contains multiple lines for a series of purchases by a single person, with a signature line for the disburser and an approval line after the purchases have been audited and approved by the bookkeeper or responsible manager.The completed forms become part of the general ledger and records of the company, kept on file for future reference and are part of the annual corporate audit. The accurate use of these forms is a clear sign of tight financial controls and proper procedures within a company.More reference links: http://www.docstoc.com/search/Petty-Cash-Form-Template/ http://www.formville.com/C18_free-petty-cash-forms.html
