Petty cash policy

If you hold a petty cash float at work for the reimbursement of small items of expenditure, it’s worth putting in place a petty cash policy to outline when and how it can be used.

Use of petty cash float

Normally, when employees incur work-related expenses, they will claim them back through your reimbursement of expenses policy and procedure. However, there are times when, for practical and efficiency reasons, it may be better to reimburse small items through a petty cash float which is held and administered by a nominated petty cash holder, normally the office manager or similar manager. If you have more than one workplace, you can hold a float at each workplace. Where you do hold petty cash, you can use our Petty Cash Policy to facilitate payments from the float.

float level

The float needs to be enough to cover small expenses without having to be continually replenished, so we suggest a level of about £200, but it’s up to you to decide how much you need. Our policy enables you to define your float level and to set the level at which it requires replenishment, e.g. when it’s down to approximately £50.

petty cash holder

As well as setting out who the petty cash holder is, our policy outlines what happens when they have either planned or unplanned absences from work. It envisages that a temporary holder will be appointed to manage the float in their absence.

Reimbursement procedure

You should require staff to produce itemised receipts for all expenditure, including where it’s to be claimed from petty cash, so this is a requirement of our policy. We’ve also confirmed that petty cash should only be used for small cost items; it’s for you to set a cost limit here, but we suggest somewhere around the £10 mark. Where the petty cash float is to be used, we’ve made clear that the purchase of the item should be made first and then the petty cash claimed, i.e. you won’t give petty cash out in advance. Our policy envisages that the employee will complete and sign a petty cash reimbursement form (which we’ve included as an appendix to the policy) and that the receipt will be attached to this form. They will then take this form to the petty cash holder who will, if approved, reimburse the cash. The remainder of the petty cash reimbursement form will then need to be completed and signed by the petty cash holder to confirm the reimbursed amount.

Security

Finally, our policy provides for the petty cash float to be kept in a lockable cash tin and stored in either a safe, a lockable filing cabinet or a lockable cupboard at all times, with only the petty cash holder (and any nominated temporary holder) having access. It’s worth conducting random audit checks from time to time to ensure that all monies are being properly accounted for and correctly documented.