Most organisations need to have a small amount of cash available to pay for day-to-day items. Even though the individual amounts might seem small, it’s important to have clear rules for the use of petty cash.
Six rules for using petty cash
1. Limit use
Petty cash should only be used for a limited number of budget headings, and only where it is really not possible to use a cheque.
Cheques are much easier to trace, and therefore better for record-keeping.
2. Set a maximum
Set a maximum amount for payments by petty cash.
3. Keep cash box secure
Ideally one person should be in charge of the petty cash box, which should be kept locked and secure.
4. No loans
Petty cash should never be used to make short-term loans.
5. Stick to a system
Use a petty cash system such as imprest and stick to it.
6. Use vouchers
A petty cash voucher (books of vouchers are available at most stationers) should be completed and signed for every payment from the petty cash box at the time the cash is taken.
This page is a summary of the information contained in the full online toolkit.
