By Jewell Cochran
While petty cash can be helpful and convenient for reimbursement of small expenditures, it is necessary to keep controls in place to eliminate cash errors or potential theft.
- The amount of cash on hand should be small enough to turn over every month or two.
- Write a brief procedure and keep it in the cash box. Remember, most petty cash custodians are not accountants.
- Perform unscheduled audits to keep custodians in check with procedures.
Here are a couple of options to eliminate petty cash all together.
- Issue credit cards with minimal spending limits to employees who truly need it.
- Reimburse staff through expense reports after they’ve spent the money.
- Both of these procedures ensure tighter controls with supervisor approval.
If you are on the fence about petty cash, remember this: multiple people involved in controlling a small amount of money translates to cost inefficiency.