The petty cash fund is a very useful system.  Many businesses use it to pay for small funds.  Some of the small funds include supplies or miscellaneous expenses.  The petty cash fund makes things much easier by having cash on hand instead of paying for everything with checks.

There are many procedures when dealing with the petty cash fund.  First of all, a slip has what was bought, what amount, the date, and other important information that is needed.  These slips should be filled out every time the petty cash fund is used to pay for something.  Another step is the Petty Cash Report.  This is a report showing how much you spent from the fund and how much you have left.  It displays the total balance of cash that is left in the petty cash fund.

There are many steps to establish and replenish a petty cash fund.  First, you must take money out of cash and put it in the petty cash fund.  This should be recorded in a journal.  Then when the petty cash fund is used, it should also be recorded in the journal so that the petty cash fund can be replenished.  In the journal, it should show everything that the petty cash fund paid for, and then take the total of that and put that much back into the petty cash fund to replenish it.

The petty cash fund is a very good system to use for many businesses.  It is good to know how to do it so that you can make a petty cash fund if you need one.  It makes paying for small things much easier.