All petty cash transactions should be recorded in a “Petty Cash Register” to maintain a clear record of all activity. The petty cash register should include the date of the payment, the amount of the payment, the entity or person paid and a brief description of the transaction.
Receipts for all purchases made from the petty cash fund should be retained and reconciled to the fund at regular intervals. At any point in time, remaining petty cash and transaction receipts should equal the total fund balance.
Authorized Custodian & Physical Safeguards
A primary and a secondary person should be assigned to serve as custodian for the petty cash fund. Custodian responsibilities should include; processing transactions, making certain that receipts are received for all activity and replenishing the fund. The petty cash fund (box, bag, etc.) should be stored in a locked safe or other secure storage device with limited access.
A reasonable limit should be assigned to the petty cash fund. The limit should be set to a level that the replenishing of the fund occurs on an average of once every thirty days.