SECURITY OF CASH

Petty cash is usually kept in a metal tin or box with a lock and key. The notes and coins held to meet petty cash claims is usually referred to as the 'float'. Inside the petty cash tin, there will be the float of notes and coins (and a pad of petty cash vouchers) plus receipts for payments of petty cash expenses made from the float. Every so often the petty cash float is topped up by withdrawing more cash from the bank account.

Clearly, there is a security problem with petty cash, and it is important that:

• the petty cash float plus vouchers are kept in a secure place, such as a locked desk drawer, to avoid loss and deter theft
• only designated responsible individuals should be permitted to make petty cash payments.

To reduce the risk of loss, a business should maintain a cash float only as much as it considers reasonably necessary, so that if the cash float is lost or stolen, the amount of the loss is minimised.