Company managers decide how much money will be kept in the petty cash fund. Once this amount is approved by the officer responsible for payments, the person in charge of the petty cash fund will be given the cash.  The cash is locked cash in the cash box and only the petty cashier has access to the key.

Making payments

The petty cashier keeps a complete and accurate record for every payment made from the petty cash fund. Petty cash receipt forms are filled out each time cash is given out. The following procedure is commonly followed in offices:

• Ask each person who seeks payment from the petty cash fund to submit a sales receipt that shows the item purchased and the price paid. Payment should not be made without some kind of receipt. Occa­sionally, cash payments are made even though no sales receipt is provided. On such occasions, the employee should present a brief memo giving the amount spent and describing the item or service purchased.
• Prepare a petty cash receipt for each payment. Ask the person who will receive the cash to sign the receipt. The receipt indicates the amount paid, to whom payment is made, and the purpose of the payment.
• Attach the sales receipt or other document to the petty cash receipt and place these papers in the cash box.

Keeping a record

In offices where many transactions require petty cash, an organized record is justified. In some departments, a petty cash record is kept for receipts and payments. In each office the same types of payments are likely to occur again and again. By recording payments as they are made, the task of preparing a report at the end of the month or when you need to add money to the fund will be simplified.

You may work in an office where petty cash records are kept manually. Spread sheet software can also be used to record petty cash transactions. In either case, attention to detail and entering all data accurately are critical when keeping petty cash records.

Replenishing the fund

From time to time, money must be added to a petty cash fund. In some offices, the fund is replenished when a certain balance is reached. In others, the fund is restored to its original amount at the end of each month regard­less of the level of funds. This procedure is commonly used in offices:

• Count the money in the cash box and total the receipts in the petty cash box.
• Compare the petty cash box total to the petty cash receipts total. They should be the same. If they are not, determine why there is a differ­ence. Did you fail to include a receipt in your total? Did someone fail to turn in a receipt?
• Add the amount of the petty cash receipts to the amount of petty cash remaining in the cash box. The total should equal the amount of petty cash you had when you last balanced and/or replenished the petty cash fund.
• Investigate any differences. Careful attention to managing the petty cash fund will result in few, if any, errors. If, after your investigation, you find that you are over or short by a few pennies, note this differ­ence on your petty cash record. For example, if in step 2 you found only R78.00 in cash, you would indicate on your petty cash record that the fund is short R0.20.
• Prepare a voucher for a cheque for the amount needed to replenish the fund. Submit your petty cash record report, the receipts, and your cheque voucher for approval to your department head or other designated person.
• Once approved, follow up by sending a copy of the report to the Accounting Department and by sending the voucher to the proper office.
• Cash the cheque and immediately place the cash in the cash box.