A petty cash fund is a small amount of money that is kept on hand to cover minor expenses that cannot be easily paid for by check or credit card. Petty cash funds are often used for items such as office supplies, postage, and small tools.
To ensure that petty cash is used properly, it is important to have a clear policy and procedures in place. The following petty cash policy and procedures template can be used as a starting point for developing your own policy.
Establishing a Petty Cash Fund
The first step in establishing a petty cash fund is to determine the amount of money that will be kept on hand. The amount of money should be enough to cover the expected expenses, but not so much that it poses a security risk.
Once the amount of money has been determined, the fund should be established by creating a petty cash account in the company’s accounting system. The account should be funded with the amount of money that has been determined.
The petty cash fund should be kept in a secure location, such as a locked drawer or safe. A petty cash custodian should be appointed to be responsible for the fund.
Using the Petty Cash Fund
The petty cash fund should only be used for minor expenses that cannot be easily paid for by check or credit card. Examples of appropriate expenses include office supplies, postage, and small tools.
When making a petty cash expenditure, the petty cash custodian should complete a petty cash voucher. The voucher should include the date, the amount of the expenditure, and a brief description of the expense.
The petty cash custodian should also obtain a receipt for each petty cash expenditure. The receipt should be attached to the petty cash voucher.
Replenishing the Petty Cash Fund
When the petty cash fund is low, it should be replenished with the amount of money that has been spent. To replenish the fund, the petty cash custodian should complete a petty cash replenishment request form.
The replenishment request form should include the date, the amount of money that has been spent, and a list of the petty cash vouchers that are being submitted for reimbursement.
Conclusion
A petty cash policy and procedures template can help to ensure that petty cash is used properly. By following the procedures outlined in the template, you can help to prevent fraud and misuse of petty cash.
Regularly reviewing and updating your petty cash policy and procedures will help to ensure that the policy remains effective and relevant.
