Petty cash
Petty cash is a small fund of cash kept at the business for minor daily expenses, topped up and recorded regularly.
Petty cash is a small amount of cash set aside for minor expenses that are not worth a cheque or a bank transfer: ice, a rickshaw for an urgent delivery, a gas cylinder refill, tea for the staff. In restaurants, petty cash is often taken from the counter drawer, which is exactly where problems begin.
Example: a fixed float
A restaurant keeps a petty cash float of Rs 10,000 with the manager. During the day he spends:
| Expense | Amount |
|---|---|
| Ice | Rs 1,500 |
| Vegetables bought urgently | Rs 2,200 |
| Rickshaw for a delivery | Rs 800 |
| Gas cylinder refill | Rs 1,200 |
| Total spent | Rs 5,700 |
He should now have 10,000 − 5,700 = Rs 4,300 in hand, with a slip for each expense. At closing, the owner gives him Rs 5,700 to bring the float back to Rs 10,000. If the manager only has Rs 3,800, Rs 500 is unexplained and needs an answer that night.
Why it matters
- Small, unrecorded spending adds up over a month.
- When petty cash comes out of the sales drawer without a record, the day's cash count can never be trusted.
- Expense records show where money is leaking, such as daily emergency vegetable purchases that better planning would avoid.
How software handles it
ArfaPOS records expenses with categories on every plan, protected by a PIN, so each payout is recorded with an amount and a reason, and the cashier's till close accounts for it. See petty cash software.
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