Using petty cash log template: Free download

Ever wondered how businesses, whether small or large, handle their day-to-day operations and minor purchases efficiently? It can be a hassle to consult your finance team for every minor expense. That’s where petty cash steps in to simplify things and keep your workflow smooth.

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In this blog, you’ll discover what petty cash is, why it's important, and how to manage it effectively. We’ll guide you through setting up and maintaining a petty cash system, provide a free template to simplify the process and explore other practical alternatives to petty cash that can streamline your business operations even further.

What is petty cash?

A petty cash fund is a small reserve of money that businesses keep to cover minor, everyday expenses. This fund is typically used for purchases like office supplies, postage, or transportation costs.

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Petty cash is especially useful for handling incidental expenses quickly and efficiently, without the need to use checks or credit cards, which might be cumbersome for small transactions. 

Why is petty cash important?

Petty cash plays a crucial role in the smooth operation of day-to-day business activities. It provides a convenient way to handle small, unforeseen expenses without the need for formal purchase orders or reimbursement processes, allowing businesses to maintain efficiency. 

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Petty cash also helps in situations where immediate payments are necessary, such as for office supplies, minor repairs, or other incidental costs. By having access to these funds, businesses can avoid delays that might occur if employees had to go through more formal channels for every small expense. 

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Additionally, maintaining a petty cash system helps track these minor expenditures systematically, ensuring transparency and accountability. This system is especially important for spend management, as it allows businesses to keep a detailed record of small yet frequent transactions that could add up over time. 

Examples of use of petty cash

• Purchasing office supplies

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• Reimbursing employees for small expenses

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• Paying for minor office repairs

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• Buying client hospitality items like snacks or gifts

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• Handling emergency purchases, such as cleaning supplies

Setting up a petty cash system

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1. Choose how to store your petty cash

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First, decide how you want to manage your petty cash. You can use a physical petty cash box for handling small cash transactions, or you might prefer an online account for digital management. Your choice should match your business needs and the types of transactions you expect.

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2. Decide on the petty cash amount

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Determine how much cash you want to keep in the petty cash fund, known as the float. It should be enough to cover small daily expenses but not so much that it becomes a risk. Regularly check and refill the float as needed.

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3. Set clear petty cash rules

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Establish clear rules for how the petty cash can be used. Decide what types of expenses it will cover and who is allowed to use it. This helps prevent misuse and keeps the system running smoothly.

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4. Use petty cash vouchers

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Whenever someone takes money from the petty cash fund, make sure they fill out a petty cash voucher. This voucher should include the date, amount, reason for the expense, and the person's signature. This keeps a clear record of all transactions and helps track where the money goes.

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Steps to create a petty cash log template

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Step 1: Title the log sheet

Start by giving your petty cash log sheet a clear and descriptive title. This could be something simple like "Petty Cash Log" or "Petty Cash Record," followed by the specific period or fiscal year it covers. This ensures that anyone reviewing the log can quickly identify its purpose.

Step 2: Include key information

At the top of the log sheet, include important details such as the fund number, the date the log is being started, and the names of individuals authorized to handle the petty cash. You should also include the initial amount of the petty cash float. This information is crucial for tracking the source and management of the petty cash fund.

Step 3: Set up columns for recording transactions

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Create columns for the following details:

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1. Dates of each transaction.
2. Receipt number for each transaction to keep records organized.
3. Provide a brief description of the expense or the purpose of the transaction.
4. Deposits added to the petty cash - note the amount here.
5. Record the amount withdrawn for each transaction.
6. After each transaction, calculate and note the remaining balance of the petty cash.

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If you need a simple way to keep track of petty cash transactions, you can download Ramp’s petty cash log template here. It’s designed to help you manage and record expenses more effectively.

Step 4: Reconcile regularly

As part of maintaining your petty cash log, regularly reconcile the log with the actual cash in the petty cash box. This involves verifying that the balance in the log matches the cash on hand and ensuring that all transactions are accurately recorded.

Step 5: Proofread and finalize the log

Before you begin using the log, take some time to carefully review it for any mistakes or missing information. Ensure that all columns are correctly labeled and that the details are clear and accurate. This step is crucial for maintaining a well-organized and error-free log, which will make tracking petty cash transactions straightforward and reduce the likelihood of confusion.

Step 6: Save and store the log 

Once you've finalized the log, save it digitally in a secure and easily accessible location, such as a cloud storage with restricted access. If you prefer to keep a physical copy, print it out and store it securely alongside the petty cash box. 

Step 7: Update the log with every transaction

Each time petty cash is used, update the log immediately. Enter the relevant details in the appropriate columns and adjust the balance accordingly. Keeping the log up-to-date helps maintain transparency and prevents discrepancies.

Example of a petty cash template

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You can easily download a sample petty cash log and template here to streamline your expense tracking.

Common challenges in petty cash management 

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With credit cards and online transactions now standard, petty cash funds are largely outdated and often introduce more risks than benefits, especially for businesses operating online.

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• Without strict policies, departments may spend petty cash carelessly, leading to poor documentation and tracking.

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• Relying too much on a single person to manage petty cash can increase the risk of errors or misuse. It’s important to separate responsibilities.

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• Using paper records can result in misplaced documents and incomplete records, making it hard to track expenses accurately.

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• Without a standardized process, petty cash logs may be inconsistent, leading to discrepancies.

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• Without proper controls, petty cash is vulnerable to misuse or fraud, especially if accountability is not enforced.

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