How to manage petty cash
Managing petty cash in a Malaysian office means keeping a fixed float for small expenses, paying out only against approved vouchers with receipts, counting the cash regularly, and topping it back up to the same amount after each reconciliation. One named custodian holds the cash, and someone else approves and checks it.
How do you set up a petty cash fund?
Set up petty cash as an imprest system: a fixed float that is topped back up to the same amount each time it is reconciled. A fixed float makes shortages easy to spot.
- Decide the float size from a few months of small expenses
- Name one custodian and one backup
- Set a maximum amount per payment and list what petty cash may and may not be used for
- Keep the cash in a locked box or safe with limited key access
- Write all of this into a short petty cash policy
The Petty Cash Operations & Disbursement Control course covers float sizing and controls.
How should money be paid out of petty cash?
Every payment needs a numbered voucher, an original receipt and an approval from someone other than the person claiming. No voucher, no cash.
- Use pre-numbered vouchers and record the date, amount, purpose and account code
- Attach the original receipt or invoice
- Get approval before payment, within the approver's limit
- Ask the recipient to sign for the cash
- Never use petty cash for salaries, personal loans or IOUs
If a receipt is lost, use a missing receipt form signed by the claimant and the approver, and treat repeated cases as a warning sign.
How do you reconcile petty cash?
Reconcile by counting the cash and adding the total of paid vouchers: together they should equal the float. Do it at a set interval and also by surprise.
A second person should watch or do the count. Record the result on a reconciliation sheet signed by both, and investigate any shortage or overage before topping up.
| Role | Responsibility |
|---|---|
| Custodian | Holds the cash, pays approved vouchers, keeps the book |
| Approver | Approves each payment within their limit |
| Reviewer | Counts or witnesses the count and signs the reconciliation |
| Accounts | Records expenses and issues the top-up |
How do you replenish and report petty cash?
After a clean reconciliation, accounts records the vouchers as expenses and tops the float back up to its fixed amount. The vouchers are then marked as paid so they cannot be claimed again.
Report petty cash spending by category so managers can see trends and move regular expenses to normal purchasing. The Petty Cash Reconciliation & Reporting course covers reconciliation and reports, and the Certified Petty Cash Administrator is a Certifyd certification aligned to NOSS competency units.
To test your controls, try the free petty cash control check or the petty cash control checklist template.
What are the steps?
Set the float and policy
Choose a fixed float, a custodian, a per-payment limit and the allowed uses, and write them down.Pay only against approved vouchers
Use a numbered voucher, attach the original receipt and get approval before paying out.Record every payment
Enter each voucher in the petty cash book with date, amount, purpose and account code.Count and reconcile
Count cash plus paid vouchers against the float with a second person, and investigate any difference.Replenish the float
Record the expenses, mark the vouchers paid and top the float back up to its fixed amount.Report and review
Report spending by category and review the float size and limits from time to time.
Where can you go next?
Courses, checks and reading on the same work.- CoursePetty Cash Operations & Disbursement Control
- CoursePetty Cash Reconciliation & Reporting
- CertificationCertified Petty Cash Administrator (CPCA)
- Free online assessmentDoes your petty cash always balance? Free petty cash control check
- GuideWhat is a three-way match in accounts payable?
- TemplatePetty cash control checklist template
- Glossary termPetty cash imprest system
- Glossary termAccounts payable (AP)
Frequently asked questions.
Short answers to what people ask first.How big should a petty cash float be?
Big enough to cover small expenses between top-ups, and no bigger. Base it on a few months of actual small spending, and review it if you top up too often or carry a lot of unused cash.
What should not be paid from petty cash?
Salaries, personal loans, IOUs and large or regular supplier bills should go through payroll or normal purchasing. Petty cash is for small, occasional business expenses with a receipt.
What should I do if petty cash is short?
Recount with a witness, check for unrecorded vouchers and arithmetic errors, and record what you find. If the shortage cannot be explained, report it to the finance lead before topping up.
Which sources does this page use?
This page states no statutory figures, so it cites no official source.
Updated 20 October 2026. General information from the Certifyd team, not legal, tax or safety advice for your workplace.