Petty cash

A small float of cash for small purchases. A control weakness in miniature.

What it means

Petty cash is a small sum held for minor expenses, replenished to a fixed float against receipts.

Why it matters

It is the most commonly abused item in a small business, not usually dishonestly but through poor records that make the accounts wrong.

What it looks like in practice

Run it on the imprest system: a fixed float, receipts for everything, and replenishment equal to the receipts. The float plus the receipts should always equal the original amount.

What to watch out for

Cash spending with no receipt, which is not deductible and cannot be evidenced in an enquiry.

Where to get proper advice

Your accountant.