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what is petty cash book

A petty cash book is a small, specialized cash book used to record minor, day‑to‑day cash expenses of a business, like stationery, tea, local travel, postage, or small repairs. It works like a mini version of the main cash book, helping track every small payment from the petty cash fund so that the total cash on hand and all tiny expenses are clearly documented and easy to reconcile.

What Is a Petty Cash Book?

A petty cash book is an accounting record used to track all petty cash transactions—every small amount taken from the petty cash box is written with date, purpose, and amount. It is usually maintained by a petty cashier or custodian, who safeguards the cash, keeps receipts, and reports the remaining balance for reconciliation.

Typical petty cash expenses include:

  • Office tea, coffee, snacks, or cleaning items.
  • Local transport or taxi fares.
  • Stationery and postage.
  • Small repairs, maintenance, or miscellaneous items.

These payments are usually done in coins and small notes rather than cheques or digital transfers, which keeps day‑to‑day operations quick and simple.

Why Do Businesses Use It?

Businesses maintain a petty cash book alongside the main cash book to avoid cluttering the main accounts with tiny transactions. It improves control over small spends and makes reimbursement and audits easier because each small payment is supported by an entry and a receipt.

Key benefits:

  • Helps avoid confusion about where small amounts of money went.
  • Ensures transparency and accountability for minor expenses.
  • Makes it easy to check balances and refill the petty cash fund when it runs low.
  • Keeps clean records for audits and internal reviews.

How a Petty Cash Book Works (Quick View)

In practice, the head cashier or accountant gives a fixed sum of cash (say ₹500 or $200) to the petty cashier to create a petty cash “float.” This amount is recorded as money received in the petty cash book, and then every small payment reduces the balance and is recorded line by line.

A very simple example flow:

  1. Opening petty cash: 200 received from main cashier – recorded on the receipts/debit side.
  1. Spend 20 on stationery – recorded on payments/credit side, balance becomes 180.
  1. Spend 30 on travel – new balance 150.
  1. When cash runs low, the petty cashier submits the book and receipts; the head cashier reimburses the total spent so the float goes back to the original level (imprest system).

This “imprest” style (replenishing back to a fixed amount) is very common for managing petty cash.

Main Features and Format

Most petty cash books include at least these columns:

  • Date
  • Particulars/description
  • Voucher number
  • Amount received
  • Amount paid
  • Balance

Larger businesses often use an analytical/columnar petty cash book with separate columns for categories like postage, office supplies, refreshments, repairs, and miscellaneous. That way they can see at a glance how much is being spent on each type of small expense.

Here is a compact illustration:

On 1 July, opening petty cash is 500.
On 2 July, ₹50 is spent on stationery and on 3 July, ₹40 on postage, and each is recorded in its own column so month‑end totals by category are easy to calculate.

Short Comparison Table

[5][1] [9][1][3] [7][1] [1] [7][1][3] [5][3]
Item Main Cash Book Petty Cash Book
Purpose Records all major cash receipts and payments.Records only small, routine cash expenses.
Typical amounts Large values (hundreds or thousands). Small values (coins, low‑value notes).
Handled by Chief or head cashier.Petty cashier or petty cash custodian.
Level of detail Broad categories for overall cash flow. Very detailed tracking of every small payment.

Mini Story Example

Imagine a small office that keeps ₹1,000 in a petty cash box for the month. Every time someone buys tea, pays an auto fare to deliver a document, or purchases markers, the petty cashier notes it down with a small voucher and pins the receipt to it. At the end of the month, the petty cash book shows exactly how that ₹1,000 was split among tea, travel, stationery, and other small items, and the head cashier reimburses the total spent so the next month starts again at ₹1,000.

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Meta description idea:
A petty cash book is a small accounting record for tracking minor daily business expenses like stationery, travel, and refreshments, helping maintain clear, auditable control over petty cash. TL;DR: A petty cash book is a small, structured record that tracks all small cash payments from the petty cash fund so businesses can control and reconcile everyday minor expenses easily.

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