A Petty Cash Policy is a document that is created by a company in order to provide guidelines for employees on how to use petty cash. Petty cash is used by company employees for small unplanned expenses that occur during the company's daily activities. The purpose of the document is to establish the rules for requesting, maintaining, and closing a petty cash account.
A Petty Cash Policy and procedures can vary from company to company. Generally, it depends on the order and the requirements the company has established to maintain the petty cash account. It is also up to the company to decide how much money to keep on the account and the purposes for what the money can be spent on. For example, a Petty Cash Policy for small businesses usually covers the most essential expenses worth about $100 on average, while bigger companies can increase their petty cash account up to $200 depending on the situation.
A Petty Cash Policy template can be downloaded below.