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What is a petty cash policy?

Petty cash funds are for the purpose of infrequent or emergency departmental purchases. All other purchases must go through the purchase order process via a requisition/request for payment. Under no circumstances can petty cash be used for personal expenses or loans.

What is the main purpose of petty cash?

Overview and Purpose The purpose of a Petty Cash Fund is to allow for the reimbursement or purchase of minor, small-dollar (less than $100), unanticipated business expenses, where the use of alternative means is neither feasible nor cost effective.

How much petty cash is allowed per year?

Petty cash provides convenience for small transactions for which issuing a check or a corporate credit card is unreasonable or unacceptable. The small amount of cash that a company considers petty will vary, with many companies keeping between $100 and $500 as a petty cash fund.

What is a petty cash policy?

Petty cash funds are for the purpose of infrequent or emergency departmental purchases. All other purchases must go through the purchase order process via a requisition/request for payment. Under no circumstances can petty cash be used for personal expenses or loans.

How do you write a petty cash policy?

Establish the total amount of cash needed in the fund at any given time. Write out the procedure on who and what needs prior approval for petty cash spending. Explain how your company documents petty cash spending, such as petty cash vouchers, petty cash books and original receipts.

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