{"id":20443,"date":"2022-09-21T17:04:50","date_gmt":"2022-09-21T11:34:50","guid":{"rendered":"https:\/\/open.money\/blog\/?p=20443"},"modified":"2023-07-06T12:16:24","modified_gmt":"2023-07-06T06:46:24","slug":"what-is-petty-cash-and-how-can-you-manage-it-better","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/what-is-petty-cash-and-how-can-you-manage-it-better\/","title":{"rendered":"What is Petty Cash, and How Can You Manage it Better?"},"content":{"rendered":"

Imagine that you need to celebrate a colleague\u2019s birthday at the office, that one of your branches has run out of toilet paper, or that you immediately need to reimburse a staff member for a small purchase. From where do you pay for these expenses? As a business owner, chances are that you do so from a small stash of money you keep for precisely these sorts of things and emergencies. It is this easily accessible stash that is known as petty cash.\u00a0<\/span><\/p>\n

We can formalize this definition and set up the scope of how petty cash should and should not be used.\u00a0<\/span><\/p>\n

What is Petty Cash?<\/b><\/span><\/h2>\n

Petty cash is the small amount of money kept readily available by a business for nominal, incidental expenses such as office supplies, snacks, client lunches, social occasions, etc.\u00a0<\/span><\/p>\n

Exactly how \u201csmall\u201d this amount should be depends on the size of the business and its day-to-day operations. A larger business, for example, may require different funds to be maintained for petty cash expenses of different departments, at different locations, while a small business may be able to manage with a fixed amount replenished each month.\u00a0\u00a0<\/span><\/p>\n

In scenarios where cheques or corporate credit cards present too much of a hassle, petty cash comes across as a quick fix because it does not entail a lengthy process or procurement system. That said, petty cash expenses will also require reconciliation like any other business transaction to avoid leakage and fraudulent practices. In cases where a business lacks a dedicated staff member to manage petty cash, or when petty cash has to be disbursed to multiple locations, it can become quite cumbersome to make sure that the entire amount is accounted for each month and all expenses are valid.\u00a0<\/span><\/p>\n

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[su_button url=”https:\/\/register.open.money\/petty-cash\/” target=”blank” background=”#663399″ size=”7″ center=”yes” icon_color=”#663399″ text_shadow=”0px 0px 0px #000000″]Learn More[\/su_button]<\/p>\n

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Petty Cash: Pros and Cons<\/b><\/span><\/h2>\n

Whether it will be beneficial to keep a certain amount of money as petty cash can vary from business to business. Still, there are few clear-cut advantages and disadvantages to it.\u00a0<\/span><\/p>\n

First, the advantages.\u00a0<\/span><\/p>\n