How Do You Keep a Petty Cash Book?

How Do You Keep a Petty Cash Book?


To keep a petty cash book, first determine the minimum daily amount of cash your company needs to cover small expenses, such as services, stationeries, parking fees, food and beverages. Each petty cash disbursement must be accompanied by a petty cash voucher and purchase receipt, and recorded in the petty cash book with the date, amount and description of the expense, explains

The book should have columns to record date, detailed description of the item, amount and running petty cash balance. Recording each disbursement into the petty cash book is critical in tracking expenses, so each expenditure should list the purpose of the transaction and clear description of the merchandise or services purchased.

If the transaction is for advance payment to employees, the petty cash custodian must secure a signed petty cash voucher from the employee. This should bear the date, cash amount and purpose of the cash advance. This must be immediately recorded in the petty cash book as an outstanding transaction until the employee returns with the corresponding receipt.

Petty cash replenishments are only paid on the equivalent value of completed transactions. Disbursements without supporting receipts are usually paid and accounted for by the custodian after a given time frame.