• Version 1.0

• Prepared by: @Lorraine Sebata

• Approved by: @Marcia Wilkinson

• Reviewed date: 2025-09-13

• Next review date: 2025-09-12

1. Purpose

This SOP outlines the procedure for managing and reconciling Petty Cash to ensure accuracy, accountability, and proper financial reporting.

2. Scope

This SOP applies to all activity related to Petty Cash, including establishing and maintaining the petty cash fund, making disbursements, and performing periodic reconciliations. This SOP applies to all employees who have access to or are responsible for the Petty Cash fund. It ensures that Petty Cash is managed consistently and in compliance with the company's financial policies and procedures.

3. Related Policies

• Credit and Loan Policy

• Anti-Money Laundering (AML) Policy

• Customer Data Privacy Policy

4. Roles and Responsibilities

• Accounts Department: Responsible for the day-to-day management of the Petty Cash fund, including making disbursements, maintaining accurate record, and performing regular reconciliations.

  All Employees: All employees who utilize the Petty Cash fund are responsible for following the established procedures and appropriate documentation.

5. Procedure: Petty Cash Reconciliation

5.1 Ascertain the Starting Float

• 5.1.1 Determine the initial amount allocated to the petty cash fund (float) at the start of the period.

• 5.2.1 Physically count the cash left in the petty cash box or drawer, including coins and notes, and record this amount.

5.3 Collect Documentation

• 5.3.1 Gather all receipts, vouchers, and supporting documents for expenses made from the petty cash fund.

• 5.3.2 Ensure each document is complete and properly authorized.

5.4 Calculate Total Withdrawals

• 5.4.1 Add up all expenses recorded in receipts or vouchers. This total should represent the amount withdrawn from petty cash during the period.

5.5 Reconcile Balances

• 5.5.1 Compare the sum of remaining cash and total withdrawals to the original float amount.

• 5.5.2 If they do not match, investigate discrepancies such as missing receipts or recording errors.

5.6 Investigate Variances

• 5.6.1 Identify and resolve any differences between expected and actual balances.

• 5.6.2 Document unresolved discrepancies and charge them to a specific account if necessary.

5.7 Replenish Petty Cash

• 5.7.1 Refill the petty cash fund to restore it to the original float amount.

• 5.7.2 Record this transaction in the accounting system.

5.8. Update Records

• 5.8.1 Create a bill with the following details:

  • From: Easyterms

  • Date: Month End Date

  • Reference: Petty Cash Replenishment

  • Description: Enter each receipt as a line item on the bill

  • Amount Due: Should equal the total amount of receipts

• 5.8.2. Scan and attach receipts to the bill.

5.9 Prepare Reconciliation Cheque

• 5.9.1 Input payment details at the bottom of the bill.

• 5.9.2 Check the box that says ‘Pay by Cheque’ and click ‘Add Payment’.

• 5.9.3 Enter cheque details and save as a PDF.

• 5.9.4 Print the cheque.

5.10. Cheque Sign-Off and Cashing

• 5.10.1 Give the cheque to the Operations Manager for review and signing.

• 5.10.2 Collect cash from customer deposits.

• 5.10.3 Deposit the petty cash replenishment cheque to replace the petty cash currently on hand.

5.11. Finance Department's Responsibility

• 5.11.1 The Finance Department should maintain all replenishments in a log and ensure the fund is kept at the designated level.

6. Documentation and Forms

• Petty Cash Log

• Receipts and Vouchers

• Reconciliation Reports

• Bills created in the accounting system

• Cheque Payment Records

7. Training

All employees responsible for managing or utilizing the Petty Cash fund will receive mandatory training on this SOP and related policies annually or upon significant revisions.

8. Review and Revision

This SOP will be reviewed annually by the Accounting Department and Operations Department to ensure its continued effectiveness, compliance, and alignment with business objectives.