Systems of Petty Cash Fund

The petty cash fund can be operated in the following two ways: -

1. Ordinary system of petty cash fund
   Under this system petty cashier is given a certain amount of cash for meeting petty expenses of the office, when he spends nearly the whole amount, he submits the amount of expensive along with surplus amount. If necessary he will be given another sum for petty payments for subsequent period.
   
   
2. Imprest system of petty cash fund The world 'impress' means' advance amount' which is personal to certain person to make petty expenses. It is a system of petty cash book where a person is given a fixed amount in the beginning of the period, the petty cashier submits the account of expenses keeping surplus amount himself. The main cashier gives to the petty cashier another sum for the reimbursement of the fund which equals the amount spent by him during the period. Thus, every time petty cashier begins the next period with the same amount of float, under this system, petty cash fund is reimbursed for the petty expenses incurred is called impress systems of the petty cash book.

Considerations for Operating Petty Cash Fund

The office establishes the petty cash fund for paying petty expenses incurred daily. The following factors should be considered carefully by the petty cashier for proper operation of the fund: -

1. Payment should be made only for petty expenses.
2. Advance payments should not be made.
3. Cash payment voucher must be used for every petty payment.
4. The fund should not be mixed with any other amount received from any source.
5. Record of petty transactions should be maintained on petty cash account AGF No. 22.
6. Request for reimbursement of the cash payment from AGF No. 6 (A) must be used for requesting reimbursement of expenditures.
7. Until reimbursement is made, the expenditures made through petty cash fund should not be posted in the bank cash book.

Forms used for Operating Petty Cash Fund

The following types of forms are used for operating the petty cash fund: -

1. Cash payment voucher (AGF No. 6)
2. Cash payment slip and cash control form (AGF No. 7)
3. Petty cash book/ Petty cash fund account (AGF No. 22)
4. Request for the reimbursement of cash payment form (AGF No. 6(A))