How to Manage Petty Cash (A Simple System for Offices)
Petty cash is, by definition, small amounts - which is exactly why it leaks. The fix isn't accounting software or a finance degree. It's a simple routine anyone in the office can follow. Here's the system.
1. Set a float (the imprest system)
Decide a fixed amount to keep in the cash box - your float. When it runs low, you top it back up to exactly that amount. Because the float is constant, reconciling is simple: cash in the box plus spends logged should always equal the float.
2. Put one person in charge
One custodian holds the cash and keeps the book. Not three people dipping into a drawer - one person, one book. This single change removes most petty-cash confusion.
3. Log every spend as it happens
The moment cash leaves the box, record it: date, what it was for, a category, and the amount. Keep a slip or bill for each. Logging in the moment - not at week's end - is what stops the small ones slipping through.
4. Categorise each spend
Tag every entry - Pantry, Travel, Stationery, Courier, Repairs, and so on. Categories turn a list of numbers into something you can actually review at month-end.
5. Reconcile weekly
Once a week, count the cash in the box and add up what's been logged. The two should equal your float. If they don't, find the gap now, while the week is fresh - not four weeks later when nobody remembers.
6. Top back up to the float
When the box runs low, refill it to the original float amount and record the top-up. You're back to a known starting point.
What to record for each spend
Date, who spent it, what it was for, the category, the amount - and keep the slip. That's everything your accountant or CA needs at month-end, and it takes seconds per entry.
Excel, a register, or online?
- A paper register is familiar, but it gets lost, goes illegible, and totals nothing for you.
- Excel totals and categorises well - use the free Excel template to start - but it breaks down when several people need to share one file.
- An online expense tracker keeps a single shared copy that totals itself and works on any phone, so the whole team can log spends without stepping on each other - try ours free (it handles petty cash and more).
Get started
Set this up in five minutes: grab the free Excel petty cash template, set your float, and start logging. If more than one person handles the cash, try the online expense tracker free when you're ready.