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The petty cash book
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Small cash payments, like stamps or cleaning materials, go through petty cash. The imprest system keeps it under control.
The imprest system
The petty cashier starts each period with a fixed amount called the imprest (float), such as £200.
Payments are made against signed petty cash vouchers.
At the end of the period, the main cashier gives the petty cashier the exact amount spent, restoring the imprest.
Payments are made against signed petty cash vouchers.
At the end of the period, the main cashier gives the petty cashier the exact amount spent, restoring the imprest.
The petty cash book
Receipts are on the left. Payments are on the right, with a total column and analysis columns for types of expense (such as postage, travel, cleaning, stationery).
The analysis column totals are debited to the expense accounts in the nominal ledger.
The analysis column totals are debited to the expense accounts in the nominal ledger.
Why use it?
It saves writing many small items in the main cash book.
It is easy to check: cash in the tin + vouchers = imprest.
It allows a junior member of staff to handle small payments with control.
It is easy to check: cash in the tin + vouchers = imprest.
It allows a junior member of staff to handle small payments with control.
The imprest is £150. During the week, £37 is spent on postage and £49 on cleaning. How much is needed to restore the imprest?
- Total spent = 37 + 49 = £86
- Restore with the amount spent
Answer: £86
The imprest system starts each period with a fixed float, pays small expenses against vouchers and restores the float by the amount spent. Analysis columns are totalled and posted to expense accounts.
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