Petty cash meaning
Petty cash is a small amount of cash on hand that is used for paying small amounts owed, rather than writing a check. Petty cash is also referred to as a petty cash fund. The person responsible for the petty cash is known as the petty cash custodian.
Petty cash examples
Some examples for using petty cash include the following:
- Paying the postal carrier the 17 cents due on a letter being delivered
- Reimbursing an employee $9 for supplies purchased
- Paying $14 for bakery goods delivered for a company's early morning meeting
The amount in a petty cash fund will vary by organization. For some, $50 is adequate. For others, the amount in the petty cash fund will need to be $200.
When the cash in the petty cash fund is low, the petty cash custodian requests a check to be cashed in order to replenish the cash that has been paid out.