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Petty cash logs, receipts and replenishment
A petty cash fund makes small cash payments traceable. Keep the physical cash, payment slips and replenishment entries connected so the fund can be checked without reconstructing purchases from memory.
This guide describes common bookkeeping practice, not a legal or regulatory requirement.
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General information, not legal or tax advice.
Document each small payment when it happens
Publication 583 describes petty cash as a way to make small payments without writing individual checks. It recommends a slip with the receipt as proof of payment. As practical log fields, include the payee, purpose, amount and approval so the bookkeeping entry has more context than a cash total.
Sources: IRS Pub 583
Compare cash on hand with outstanding slips
In the IRS example, a fixed $50 fund contains $17 in slips and $33 in remaining cash. Those amounts add back to the original fund. Use the example to understand the reconciliation, then count your actual cash and investigate missing receipts or unexplained differences.
Sources: IRS Pub 583
Replenish from the documented spending
The IRS example restores the fund by writing a check for the outstanding slips, then summarizing the slips in the disbursements journal. Keep the reimbursement batch attached to the receipts. As a practical control, avoid recording both the original purchases and the replenishment as additional expenses.
Sources: IRS Pub 583
Keep personal purchases outside the fund
Publication 583’s example avoids paying personal or nonbusiness expenses through the business account. If personal spending has entered petty cash, identify it for review rather than hiding it in supplies. Discuss the appropriate owner-account treatment with your bookkeeper and CPA before closing the period.
Sources: IRS Pub 583
Include cash receipts in the quarterly purchase review
For a business filing quarterly California sales tax returns, the verified Q3 2026 deadline is November 2, 2026. Include petty cash purchase receipts in the records supplied to the sales tax preparer before that review. The payment method should not leave purchases outside the document collection process; your adviser determines any applicable tax treatment.
Sources: document each small payment when it happens
Bring cash slips back into the books
Tidwell helps reconcile the books and organize supporting schedules for your business decisions. We work with your CPA on tax questions and the financial records they need.