The petty cash book

Every business has small, everyday payments: auto fares, cartage (carrying charges), postage, stationery, tea. Writing each one in the main cash book would burden the head cashier. So a petty cashier handles them in a separate petty cash book.

Most firms use the imprest system. The petty cashier is given a fixed sum, the imprest, say ₹2,000. At the end of the week or month, the head cashier gives back exactly the amount spent, so the petty cashier again starts with ₹2,000.

The petty cash book has a Total column and an analysis column for each common expense (postage, telephone, conveyance, stationery), with a last column for miscellaneous items. Each payment is written twice: once in Total and once in its own column.

Samaira Traders had an imprest of ₹2,000 and spent ₹1,487: postage ₹325, telephone ₹121, conveyance ₹349, stationery ₹390 and miscellaneous ₹302. The balance left was 2,000 − 1,487 = ₹513, and ₹1,487 was given back to restore the imprest.

Posting is easy: the total of each analysis column is debited to that expense account (Postage A/c, Stationery A/c...), and the petty cash account is credited with the total spent. This saves time, keeps the main cash book uncluttered, and makes small spending easy to check.