Avoid Using a Petty Cash System

Before bank card payments became the preferred way of purchasing items, most businesses ran a petty cash system. This involved keeping cash, drawn from the main bank account, in a locked cash tin that was often kept in a safe. If a cash purchase for the business was necessary, such as stamps, a document was filled in asking for the money and the reason why, which would then be approved. The money was taken from the cash tin, the purchases bought, the receipt and any change returned to the petty cash.

A long drawn out procedure for a small transaction.

It is also common for the petty cash not to balance, which occurs when the amount that should be in the tin after the total of the receipts is taken from the original amount isn’t the same. So more time is taken while you work out the error.

If at all possible, don’t use cash in your business. Make all purchases using a bank card wherever possible. When this is not possible, make the purchase using personal cash and have it paid back on a monthly expense claim.

If you already have a petty cash system, balance it at the end of the month, pay any monies remaining back into the main account and start using a bank card. If staff require business bank cards, start the process with your bank.


Do not set up a petty cash system.

Always use a bank card for purchases.

If a cash purchase is absolutely necessary, use personal cash and reclaim.


  • Make all business purchases with a bank card where possible
  • Petty cash systems are inefficient and often the cash doesn’t balance
  • When this is not possible, use personal cash and claim it back through expenses

Apr 16, 2015