What's the per-transaction limit?

Best practice: $50-100 per transaction. Above that, require a corporate card or expense reimbursement instead. Higher limits make the box too tempting and reduce control; lower limits force out-of-pocket employee expense for routine purchases. Adjust based on your business needs.

Can employees borrow from petty cash?

No — never. "I owe it back" advances mix petty cash with personal lending and break the imprest system. If an employee needs a true advance, use a documented employee-advance form treated as a separate accounting entry. The petty cash box is for documented, receipted disbursements only.

What if a receipt is missing?

Document the missing receipt with a "lost receipt affidavit" — date, vendor, amount, description, employee signature. Most companies allow a small number of these per period; chronic missing receipts indicate a control problem with that custodian or process. The IRS may disallow expense deductions where receipts are systematically missing.

Should I move away from petty cash to a corporate card?

Many companies are. Corporate-card programmes (Brex, Ramp, Mercury, AmEx) offer better fraud protection, automatic transaction logging, easier reconciliation, no physical cash to count, and often spending controls (per-vendor or per-employee limits). Petty cash remains useful for cash-only neighbourhood vendors, tipping, and ad-hoc micro-purchases — but the percentage of business needing actual cash has declined dramatically.

How does the IRS treat petty-cash expenses?

No special treatment — petty-cash purchases are deductible like any other business expense, with the standard substantiation requirements (receipt for $75+, business purpose documented). The petty-cash log itself is the expense record. Audit findings most commonly involve incomplete logs, mixing of personal and business, or receipts that don't match the log; clean log + receipts in the box = no audit issue.

Petty Cash Log Template

Running record of petty-cash disbursements with receipts, balance reconciliation, and replenishment.

Customise

Company

Office / location

Petty cash custodian

Petty cash float (USD)

Period — start

Period — end

Transactions (one per line: date | description | amount | recipient | receipt#)

Replenishment date (when float reset)

Replenishment amount (USD)

Replenishment approved by

Reconciliation notes

Live preview

ACME CORPORATION
PETTY CASH LOG

═══════════════════════════════════════════════════════════════════════

Location:                Portland HQ — Reception
Custodian:               Casey Brooks (Office Manager)
Float (target balance):  $200.00
Period:                  May 1, 2026  to  May 31, 2026

═══════════════════════════════════════════════════════════════════════

TRANSACTIONS

Date          Description                                       Amount      Recipient            Receipt #
────────────  ────────────────────────────────────────────────  ──────────  ──────────────────  ─────────
2026-05-02 | Office milk + coffee supplies | 18.42 | Casey Brooks | R-001
2026-05-04 | Postage for client mailing | 12.55 | Casey Brooks | R-002
2026-05-08 | Replacement printer ink (urgent) | 47.99 | Maya Chen | R-003
2026-05-11 | Lobby plant replacement | 24.00 | Casey Brooks | R-004
2026-05-14 | Bagels for Friday team meeting | 28.50 | Priya Patel | R-005
2026-05-21 | Stationery + stamps refill | 19.30 | Casey Brooks | R-006
2026-05-28 | Cash to courier (one-off urgent delivery) | 35.00 | Sam Taylor | R-007

  TOTAL SPENT THIS PERIOD:                         $185.76

═══════════════════════════════════════════════════════════════════════

BALANCE RECONCILIATION

  Starting float:                                  $200.00
  Less: total spent this period:                   ($185.76)
                                                   ──────────────
  Expected cash on hand at period end:             $14.24

  Replenishment (date May 31, 2026): $185.76
  Approved by:                                     Maya Chen, Controller

  Restored float (target):                         $200.00

═══════════════════════════════════════════════════════════════════════

NOTES

All receipts accounted for; no discrepancies between log, receipts, and physical cash on hand.
Discrepancies (if any): document amount, suspected cause, action taken.

═══════════════════════════════════════════════════════════════════════

CONTROLS

  • All disbursements require a receipt and entry in this log.
  • Single transaction limit: $100 (consult controller for amounts above).
  • Custodian counts cash daily; controller reconciles weekly.
  • Replenishment requires manager approval and receipts review.
  • Cash is stored in a locked drawer; key with custodian and one backup only.

═══════════════════════════════════════════════════════════════════════

CUSTODIAN CERTIFICATION


_______________________________            Date: May 31, 2026
Casey Brooks (Office Manager)


CONTROLLER REVIEW


_______________________________            Date: May 31, 2026
Maya Chen, Controller

About this template

Petty cash is a small fund of physical cash kept on hand for low-value, time-sensitive purchases that don't justify the friction of a corporate card or expense reimbursement — typical examples are postage, milk and coffee for the office, taxi fare for an unexpected courier, replacement printer ink during a customer demo, or a small thank-you item. The "imprest" system is the standard accounting framework: a fixed float (typically $100-500 for small offices, higher for larger operations) is established, every disbursement is logged with a receipt, and at period end the float is replenished by exactly the amount disbursed. The float thus stays constant in dollar terms; only the composition (cash + receipts) changes during the period. The most-controlled element is the receipt requirement — every disbursement must have a receipt entered against it, and the sum of cash + receipts in the box must equal the float at all times. The custodian counts daily; controller reconciles weekly or per replenishment cycle. Common control failures: (a) "I owe it back" loans from the petty cash box (forbidden — these are advances, not disbursements; require employee-advance form), (b) personal use mixed in (forbidden), (c) reimbursements above the per-transaction limit (must use formal expense form instead). Tax-wise, petty-cash purchases are deductible business expenses if substantiated like any other; the IRS does not have special rules for petty cash beyond standard substantiation. Many small businesses are migrating away from physical cash to corporate-card programmes (Brex, Ramp, Mercury) with similar control benefits and better fraud protection; petty cash remains useful for offices with cash-only neighbourhood vendors, ad-hoc tipping, and infrequent micro-purchases.

When to use it

Office with regular small cash purchases.
Receptionist or office manager handling miscellaneous expenses.
Reimbursement for tipping (catering, deliveries) and small supplies.
Period-end reconciliation and replenishment.
Audit support for cash disbursements.

What to include

Custodian and location.
Float amount.
Each transaction with date, description, amount, recipient, receipt #.
Balance reconciliation.
Replenishment record.
Custodian and controller signatures.

Frequently asked

Typical range: $100-500 for small offices, up to $1,000-2,000 for larger operations or those with regular cash-vendor needs. The float should cover roughly 1-2 weeks of normal usage; replenish weekly or biweekly. Higher amounts increase fraud risk; lower amounts increase administrative friction.

⚠ Legal disclaimer. Petty cash controls are operational best practice rather than a regulatory mandate at the federal level — but state and local sales-tax laws may require receipt retention, and any business deducting petty-cash expenses on the federal return must maintain substantiation under IRC §6001 and Treas. Reg. §1.274-5. Internal controls protect against employee fraud; companies handling cash should consider bonded employees and separate custodian/reconciler roles.