Guides · Bookkeeping
Petty cash, explained
Petty cash is the small float a business keeps for the little expenses that are not worth a cheque or a bank transfer — tea, stamps, a quick courier. Small as it is, it still needs a system.
What petty cash is for
Petty cash covers minor, everyday spending where paying by bank would be clumsy. A fixed float is kept on hand, small payments are made from it, and each is recorded with a note or a voucher.
The amounts are small individually, but they add up, and unrecorded they become a quiet leak in the accounts.
Keeping it controlled
A common approach is the imprest system: the float starts at a set amount, and it is topped back up to that amount by exactly the total spent, so the reimbursement equals the receipts. That makes the fund self-checking — cash on hand plus vouchers should always equal the float.
The discipline is simple: a voucher for every payment, and a top-up that matches the vouchers.
How Lekha keeps small spends recorded
Lekha records payments against the documents behind them, so even small expenses are captured with their evidence rather than lost as loose cash.
Lekha records what your documents say and tracks the money on both sides — what you owe and what you are owed. It records and tracks; it does not replace your accountant.
Questions
- What is petty cash?
- A small fund kept on hand for minor everyday expenses that are not worth a cheque or bank transfer, with each payment recorded by a voucher.
- What is the imprest system?
- A method where the petty cash float is topped back up to a set amount by exactly the total spent, so cash on hand plus vouchers always equals the float.
- Why record small petty-cash spends?
- Because small amounts add up, and unrecorded they become a quiet leak. A voucher for each keeps the fund controlled and the accounts complete.