About handling petty cash

General
1

Hi all, I just wanted to check:

  1. Is there a limit on how much we can withdraw or keep as petty cash?
  2. What is the best way to track petty cash expenses so its easy on us during audits?
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2

Thanks for your query

  1. There is no legal provision on the amount of petty cash fund. Ideally, the fund amount should meet two to three weeks of your petty cash expenses. That should be the size of fund. Petty cash fund could be kept in cash or can be given as imprest to staff. Replenishment maybe done once 70-75% of the fund is utilized.
  2. You can capture petty cash expenses on an excel sheet titled petty cash expense sheet. The supporting for each expense can be attached to this sheet and submitted to Accounts for settlement and replenishment.

Hope it clarifies.

CS Sharad Bhargava

3
  1. There is no limit prescribed for the maintenance of petty cash. It depends on the requirement of the organization. Moreover, this can also be issued to an admin (preferably) staff and can be replenished at an agreed frequency
  2. Moreover, for NGOs dealing in multiple projects, it is always better to have a project wise petty cash statement for better tracking.
  3. In the current context where most of the petty payments can be made from UPI, the practice of weekly reimnuirsment can also be followed to avoid any kind of cash withdrawal
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