Petty cash accounts today are used to pay for small purchases, such as food for the office lunch, coffee supplies, or for parking. If you run a business with multiple locations or sites, each will typically support their own petty cash account. Every purchase using petty cash must be documented in the same way as other business income and expenses. Using a petty cash log or petty cash slips help capture these expenses. Challenges to this process include the hassle factor in reconciling and replenishing the petty cash accounts and the temptation of having ready cash on hand.
Consider the trend that while not yet a cashless society, we are a much more debit card-friendly world. Set out to eliminate or significantly reduce the amount held in your petty cash or imprest account by allowing certain employees to use debit cards tied to your operating account. Most banks issue debits cards on commercial accounts. Moreover they can issue multiple cards and place daily expenditure limits on each card. It is important to work with your bank to block ATM access because debit cards typically are enabled for cash withdrawals at ATMs.
You will have visibility on expenses almost immediately through online banking. Limit your exposure through the daily limits and post expenses as they happen. Your employees will appreciate not having to pay out of their pocket and get reimbursed from the petty cash fund. A debit card is much more convenient.