Petty cash is a small amount of cash, usually around $100 for small businesses, that is kept on hand for small, miscellaneous company expenses. Examples of petty cash needs would be postage due for a package that arrives, gas expenses for a company car for an errand, parking, office supplies for a quick project, and food for bottled water or coffee supplies.
You might also need petty cash to make change for customers.
The word "petty" comes from the french word "petite" which means "small." If your company has more than one department, you may need more than one petty cash fund. If you have more than one petty cash fund, you will need a custodian or manager for each of your petty cash funds.
Petty cash funds should be watched carefully for theft and, for that reason, be kept as small as possible. They should also be subject to particular bookkeeping procedures.
Pay the postage due on that package from the petty cash fund.
