Petty cash covers the small daily payments that are too small for a bank transfer: taxi fares, courier charges, water, stationery, a quick repair. Without a system, the box never balances and nobody knows where the money went. Here is a simple routine that works for shops and small offices in the UAE and elsewhere.
1. Set a fixed float
Decide how much the box should hold, for example AED 1,000 or AED 2,000. Pick an amount that covers about a month of small spending. This is the float. It stays the same; you only top it back up.
2. Give one person responsibility
Name one custodian who holds the key and records payments. When two people share the box, differences are impossible to trace.
3. Use a voucher for every payment
Every time money leaves the box, fill in a voucher: date, amount, what it was for, who received it and who approved it. Staple the receipt to the voucher. No voucher, no cash.
4. Record it in a petty cash log
Enter each voucher in a log with a category (transport, office supplies, refreshments, repairs, postage). The running balance shows what should be in the box at any moment.
5. Count the box every week
Count the cash and add up the vouchers. Cash plus vouchers should equal the float. If they don't, find the difference that week while people still remember.
6. Top up once a month
At the end of the month, total the vouchers by category, have the totals approved, and withdraw exactly that amount from the bank to bring the box back to the float. Hand the vouchers and receipts to whoever keeps your books.
A note on VAT
If you are VAT-registered, keep the supplier's tax invoice for purchases where you want to recover input VAT. A simple cash receipt may not be enough. Your accountant can tell you which petty cash expenses qualify.
Templates for this system
- Petty Cash Log (Excel): running balance, categories and monthly totals calculated for you.
- Petty Cash Voucher (Word): a printable voucher with amount, purpose and approval signatures.
- Cash & Bank Book (Excel): record cash and bank movements side by side.
- Bank Reconciliation (Excel): match your records to the bank statement each month.