---
title: "Petty cash"
description: "Petty cash is a fixed cash fund for small payments. How a petty cash fund works, what records it needs and the controls that keep it balanced."
canonical: https://engine.com/glossary/petty-cash
updated: 2026-11-02
author: "Engine Editorial"
---

# Petty cash

Petty cash is a fixed fund of currency or coin, held by a cashier, that a business uses to make small payments without writing checks for small amounts.

Also called: petty cash fund, imprest fund

Updated November 2, 2026 by Engine Editorial

## What is petty cash?

Petty cash is a small, fixed pot of cash for payments too small to write a check for. This cheat sheet covers how to think about the fund and the controls that keep it honest. The detail is further down.

### How to think about it

- **It's a fixed amount.** The U.S. Treasury describes an imprest fund as fixed cash or a petty cash fund, in currency or coin, advanced to a cashier.
- **It replaces small checks.** The IRS says a petty cash fund lets you make small payments without having to write checks for small amounts.
- **Every payment gets a slip.** Fill out a petty cash slip for each payment and attach it to the receipt as proof of payment.
- **You refill it with a voucher.** In the IRS's own imprest funds, the cashier prepares a reimbursement voucher to bring the fund back to its correct balance.

### Controls to put in place

- **Split the duties.** In IRS imprest funds, the cashier must not control or approve the spending from the fund.
- **Count it by surprise.** The IRS audits imprest funds held as cash, unannounced, at least once each quarter, checking the balance, what the fund actually holds, the paperwork and physical security.
- **Audit at every handoff.** When one cashier hands the fund to another, the outgoing and incoming cashiers do a full audit.
- **Lock it up.** IRS rules bar keeping imprest fund checks and records in a desk drawer or a file cabinet without a key lock.

## How the IRS audits its own imprest funds

| Review | When | What it checks |
| --- | --- | --- |
| Monthly audit | Every month, for funds kept at a financial institution | The bank statement and the expenses |
| Unannounced cash audit | At least once a quarter, for cash held outside a financial institution | Fund balance, what the fund actually holds, expense paperwork, physical security |
| Transfer of accountability audit | Whenever a cashier hands the fund to another cashier | A full audit by both cashiers |

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## Questions

### What is petty cash used for?

Small payments. The IRS describes a petty cash fund as a way to make small payments without having to write checks for small amounts.

### What is a petty cash slip?

A record you fill out each time you pay from the fund. The IRS says to attach it to the receipt as proof of payment.

### Is petty cash the same as an imprest fund?

The U.S. Treasury defines an imprest fund as fixed cash or a petty cash fund in currency or coin advanced to a cashier.

### How is petty cash replenished?

In the IRS's own imprest funds, the cashier prepares a reimbursement voucher, and accounts payable reviews it and restores the fund to its correct balance.

## Go deeper

- [Out-of-pocket expense](https://engine.com/glossary/out-of-pocket-expense)
- [Reimbursement](https://engine.com/glossary/reimbursement)
- [Cash advance](https://engine.com/glossary/cash-advance)
- [Engine Direct Bill](https://engine.com/features/direct-bill)

## Sources

1. Internal Revenue Service, "Publication 583 (12/2024), Starting a Business and Keeping Records," https://www.irs.gov/publications/p583, accessed November 2, 2026.
2. U.S. Department of the Treasury, Bureau of the Fiscal Service (TFX), "Imprest Fund," https://tfx.treasury.gov/taxonomy/term/10551, accessed November 2, 2026.
3. Internal Revenue Service (Internal Revenue Manual), "1.35.18 Imprest Funds," https://www.irs.gov/irm/part1/irm_01-035-018, accessed November 2, 2026.
4. Engine, "Direct Bill for Company Hotel Travel," https://engine.com/features/direct-bill, accessed November 2, 2026.