Petty cash
Petty cash: a small cash fund for minor expenses, usually run on the imprest system, where the float is topped back up to a fixed level each period to match the vouchers spent.
See it move
A company runs petty cash on the imprest system with a fixed float of €200. Over the month the cashier pays vouchers for stationery €35, postage €18 and taxi fares €47, totalling €35 + €18 + €47 = €100. At month end €200 − €100 = €100 remains in the box, and the company reimburses exactly €100 to restore the float to €200.
The formula
Variables
- Reimbursement (€)
- Fixed imprest float (€)
- Cash remaining in the box before reimbursement (€)
Gives the amount needed to top the petty cash box back up to its fixed float; under normal circumstances this equals the total of vouchers issued during the period.
Check yourself
A company runs petty cash on the imprest system with a fixed float of €150. During the month, vouchers are issued for cleaning supplies €22, courier fees €31, and refreshments €19 (total €72), which would imply €150 − €72 = €78 remaining. A physical count at month end, however, finds only €74 in the cash box. How much should be reimbursed to restore the float to €150?