I’ve just been looking at a trial balance that shows that there’s R13 750 in the petty cash box.

I look at the transactions and all I see is R13 750 going into Petty Cash and nothing coming out.

Clearly this is wrong. Now, in the old days, we used to keep a Petty Cash Book and recorded all payments made with cash. This had to reconcile to the amount of cash in the box. A nightmare!

Then someone came up with the idea of the Imprest Petty Cash System. Here it is –

Put say, R4000 in the box.

Whenever money is taken from the box it is replaced by a slip or slips for that amount.

If the person has to have cash before spending the money then the slip is an IOU for the amount taken and is replaced upon that person’s return with the sales slips plus the change.

So at any one time the box will ALWAYS hold R4000 either in cash or slips.

When the money gets too low, say with only R752,56 left in the box in cash, and R3247,44 in slips, R3247,44 is drawn from the bank and deposited in the box. The slips are taken out and sorted by type of expense. The “Fuel” slips are stapled together and their total written on the top slip say, R2500. Same with the “Staff Welfare” slips say, R642,75, same with the “Cleaning” slips say, R305,66 etc.

The bookkeeper then posts the withdrawal from the bank (a Credit of R3247,44) and expenses Fuel R2500, Staff Welfare R642,75, Cleaning R305,66 etc.

And there’s exactly R4 000 in the cash box.