2 min read
Definition
Petty cash is a small sum of physical cash a business keeps to pay for minor, incidental expenses — postage, small supplies, refreshments — that are impractical to settle by bank transfer or card. It is topped up periodically and recorded against receipts.
In plain terms
Typically managed on an imprest system: a fixed float is held, spending is recorded with receipts, and the fund is topped back up to the float by the amount spent, so the total is always accounted for.
Why it matters
Petty cash is small in the scheme of cash flow but needs proper records for accounting and control. See float and cashbook.
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