A petty cash is that liquid asset of the company or the corporation, which can be easily stolen. No matter how trustworthy your employees are, if you will leave your petty cash openly somewhere, there is a high chance that it can be stolen. The petty cash must be supervised. You must have specific instructions as to when the petty cash can be used. You should not let all of your employees have access to the petty cash. It is never wise to leave your petty cash off the books. Every employee of the company or the organization must keep a record of the petty cash by writing down every transaction along with the date and the receipts.
Petty cash is that discretionary money available in the small amount, which is used to make payments when it is no sensible to write a check. Some people also called it as a petty cash fund, the person who is responsible for looking after the petty cash is known as the petty cash custodian. Some organizations and companies have set up a system of finding out the petty cash. To have a small amount of cash in the office at all times makes it easier for the supervisors, book keepers and managers to cover occasional small expenses. Petty cash should be handled with care, otherwise even though it is in small amount, it can be easily abused or stolen.