What is Petty Cash?
Nexa Consultancy | Startup & Finance Glossary
Petty cash is a small amount of cash kept on hand by a business to pay for minor, incidental expenses where it is not practical to write a cheque or use a credit card. Examples include paying for office supplies, small reimbursements to employees, or courier charges.
For Startups: While most startups aim to be digital-first, having a petty cash fund can be useful for handling small, immediate expenses. It's important to have a clear process for managing and reconciling the petty cash fund. One person should be designated as the custodian, and all disbursements should be supported by a voucher or receipt.
Example: A startup maintains a petty cash fund of ₹5,000. An employee buys office stationery for ₹500 and submits the receipt to the petty cash custodian to be reimbursed.