A petty cash log should record every cash payment and replenishment, including the date, amount, purpose, recipient, supporting receipt or voucher reference, and the person responsible for the transaction. It should also track the fund’s opening balance, money added, and balance remaining so someone can reconcile the cash to the written record.
What a petty cash log is for
A petty cash log is a running record of small cash transactions made from a set-aside fund. A business, nonprofit, club, or office might use one for modest purchases such as postage, basic office supplies, or a small local delivery expense. The log helps show where the cash went and how much should still be in the box or envelope.
It is not simply a list of purchases. A useful log links each payment to a person, a business purpose, and evidence such as a receipt or signed voucher. That makes it easier to check a transaction later, spot a missing receipt, and explain differences between the physical cash and the balance recorded on paper.
Petty cash is generally intended for small, occasional payments, not as a substitute for an organization’s normal purchasing or payment process. The organization should set its own fund limit, permitted uses, approval rules, and replenishment routine. Those rules determine which details need to be captured in addition to the basic transaction information.
Essential fields to record for each transaction
Each payment should have its own line or transaction record. Combining several purchases into one vague entry makes it harder to verify the total or identify which receipt belongs to which expense. A practical log usually includes these fields:
- Date: Record when the cash was handed over or the purchase occurred. If those dates differ, follow the organization’s established method consistently.
- Voucher or reference number: Use a unique number to connect the log entry with a paper voucher, receipt packet, or digital record. This is especially helpful when documents are filed separately.
- Description and business purpose: State what was bought and why it was needed. “Envelopes for outgoing customer mail” is more informative than “supplies.”
- Paid to or received by: Identify the shop, supplier, employee, or other recipient. If an employee receives cash to make a purchase, record that person and later attach the purchase receipt.
- Expense category or account: Use the organization’s categories, such as postage or office supplies, if it uses them. A consistent category makes later review and recordkeeping easier.
- Amount paid: Enter the amount actually taken from the fund, with the currency clear if the organization handles more than one currency.
- Tax or other breakdown, when needed: If the organization’s records require a separate tax amount or other split, record it as a separate field and use the receipt as the source. It is not necessary to invent a breakdown when the supporting document does not provide one.
- Authorization and initials: Note who approved the payment and who issued or received the cash, using signatures, initials, or an approval reference according to local procedures.
- Receipt or evidence status: Mark whether a receipt is attached, filed elsewhere, or missing, and note any follow-up needed.
The exact labels can differ, but each entry should answer the practical questions: when did the cash move, how much moved, who was involved, what was it for, and what evidence supports it?
Record the fund balance and cash movements
A transaction log should make it possible to calculate the expected cash on hand. Start with the fund’s opening balance. Subtract each cash payment and add each replenishment or other authorized cash addition. The resulting figure is the expected balance, which can be compared with the physical cash during a count.
For example, if a fund begins with 100 units of currency and pays 12 for postage and 18 for supplies, its expected cash balance is 70. If an authorized replenishment of 30 is then added, the expected balance becomes 100. The log should show the replenishment as a separate movement, rather than changing the original fund amount without an explanation.
Include a separate entry for cash returned after a purchase, a refund, or a correction. Describe what the entry relates to and link it to the original payment where possible. This preserves the trail instead of quietly editing an earlier amount. If the fund has a fixed authorized amount, the replenishment record can also show how much was restored and when.
Receipts, vouchers, and supporting evidence
A receipt supports the amount and nature of a purchase, but it may not explain why the purchase was needed or who approved it. A voucher can fill those gaps. It can record the requester, purpose, amount issued, recipient’s acknowledgment, and the receipt reference. If cash is advanced to an employee before a purchase, the voucher can remain open until the employee returns the unused amount and submits the receipt.
Attach or file evidence so it can be matched to the correct log entry. A simple numbering system works well: write the same voucher number on the log line and the supporting document. For a digital log, a file name or document reference can serve the same purpose, provided the organization can retrieve the record later.
If a receipt is unavailable, do not create a replacement receipt or describe the purchase as documented when it is not. Record the amount, purpose, recipient, and reason the receipt is missing, then follow the organization’s exception process. A supervisor may need to review or approve the explanation. Keep the note factual and make clear what evidence does and does not exist.
How to use the log from payment to replenishment
A reliable routine is more useful than a complicated form that people do not complete. A typical process looks like this:
- Check the request: Confirm that the purchase is permitted under the organization’s petty cash rules and that the amount is within any applicable limit.
- Document approval: Obtain the required approval before handing over cash, or record the approved exception if the procedure allows approval afterward.
- Make the entry: Record the date, amount, purpose, recipient, category, and reference number at the time of payment. Avoid relying on memory at the end of the week.
- Collect evidence: Obtain the receipt or completed voucher and connect it to the transaction using the same reference.
- Update the balance: Calculate the new expected cash balance after each payment or cash addition.
- Count and review: Periodically count the cash and compare it with the expected balance and the supporting documents.
- Replenish and file: Follow the organization’s approval process for replenishment, record the cash received, and store the reviewed records together.
How often the fund is counted or replenished depends on its size and how frequently it is used. A count at each replenishment is a straightforward checkpoint; a more active fund may need additional checks under the organization’s procedures.
Petty Cash Log Template
Copy or print this blank log. Add rows as needed, and use a separate voucher or receipt reference for each payment. Keep opening balance and replenishment entries identifiable so the cash balance can be followed.
| Date | Voucher / Reference | Description and Purpose | Paid To / Received By | Category | Cash Paid Out | Cash Added | Expected Balance | Approved By | Receipt Status |
|---|---|---|---|---|---|---|---|---|---|
Sample only—fictional details: 6 May | PC-014 | Postage for outgoing office mail | North Street Post Office | Postage | 12.00 | — | 68.00 | J. Lee | Receipt attached. This example assumes an opening balance of 80.00 and no other transactions.
Opening balance: ____________________ Counted by: ____________________ Count date: ____________________
Reconciling the log with the cash
To reconcile, count the cash physically and compare it with the expected balance calculated from the opening balance, payments, and additions. Then compare the logged payments with their vouchers and receipts. If the figures agree, record the count date and the person who performed it. If they do not, document the difference and investigate rather than changing figures merely to make the totals match.
Common causes of a difference include a transaction that was not entered, a receipt filed under the wrong reference, a calculation error, cash returned but not recorded, or an unauthorized use of the fund. Recount the cash, check the arithmetic, and review the period’s supporting documents. Record any correction as a dated, explained entry in accordance with the organization’s process so the record remains understandable.
Where practical, having someone other than the cash custodian review a count adds a useful independent check. Small teams may not be able to separate every task, but they can still document who counted, who reviewed, and what was done to resolve a discrepancy. The aim is a clear trail, not an unexplained balancing adjustment.
Paper logs, spreadsheets, and other formats
A printed log can work well for a low-volume fund if it is kept with the cash and entries are legible. A spreadsheet makes it easier to calculate a running balance, sort transactions, and search by category, but formulas should be checked and the file should be protected from accidental edits or loss. A digital record can also link to scanned receipts, subject to the organization’s recordkeeping rules.
Whatever format is chosen, preserve the same essentials: identifiable entries, supporting evidence, a traceable balance, and a record of review or approval. Avoid overwriting an earlier transaction without leaving a correction trail. Use a consistent date and currency format, and make a backup of electronic records as appropriate. A highly detailed system is not automatically better if staff cannot use it consistently.
Common mistakes and how to prevent them
- Writing vague descriptions: “Miscellaneous” does not explain the purchase. Include the item or service and the reason it was needed.
- Recording entries later from memory: Delays increase the chance of forgotten details. Make the entry when cash is issued or returned, then complete the evidence record promptly.
- Leaving out the recipient or approver: An amount alone does not show who handled the cash. Record roles and names or approved identifiers consistently.
- Mixing replenishment with spending: Treat cash added to the fund as a separate movement, not as a purchase. This keeps the balance calculation clear.
- Using one line for unrelated purchases: Separate transactions so each amount can be matched to its own evidence and category.
- Ignoring missing receipts: Flag the exception and follow the review process instead of leaving a blank that could be mistaken for an oversight.
- Allowing unclear custody: Define who holds the fund and who can authorize payments. Shared access without a clear handoff makes differences harder to investigate.
Rules for petty cash, accounting categories, and document retention can vary by organization and jurisdiction. For a situation that depends on tax treatment or other professional requirements, ask a qualified professional rather than treating this general log guidance as specific advice.
Frequently Asked Questions
What is the most important information in a petty cash log?
A dated amount, clear business purpose, recipient, supporting-document reference, and updated balance are the core details. Approval and receipt status help make the record verifiable.
Should every petty cash payment have a receipt?
Receipts should be collected whenever available and required by the organization’s procedure. If one is missing, record the reason and follow the organization’s exception and approval process rather than implying that a receipt exists.
How do I calculate the petty cash balance?
Start with the opening cash balance, subtract payments, and add authorized replenishments or other cash returned to the fund. Compare that calculated balance with a physical count.
Should replenishment be entered as an expense?
No. Replenishment is cash added back to the fund, not a new purchase. Record the original purchases as expenses in the log and show the replenishment separately as a cash movement.
Can I keep a petty cash log in a spreadsheet?
Yes, if the spreadsheet records the same transaction details, preserves supporting-document references, and can be reviewed and retrieved when needed. Check formulas and keep an appropriate backup.
How often should petty cash be reconciled?
Follow the organization’s procedures. Reconciliation at replenishment is a practical checkpoint, and a fund with frequent activity may warrant additional counts. Record the count and any discrepancy clearly.