Petty cash is a small cash float a business gives an employee to pay minor day-to-day expenses, settled later against receipts. This page has the four petty cash forms a business needs, linked to one log: a cash request, the petty cash log with a running balance, a petty cash reconciliation and a weekly expense report.
Cash left = float received − spent, and it must equal the cash you count. In the example: SAR 3,000.00 − 999.60 = 2,000.40, of which SAR 99.08 is input VAT you can recover from tax invoices.
How to use this petty cash template
- In the Cash request tab, enter the custodian, amount and purpose; the amount is written out in words. Print it for approval before the cash is paid out.
- In the Petty cash log, enter the float under "Received" in the first row, then one expense per row with its receipt number.
- Set "Tax invoice?" to Yes when the invoice carries your company name and VAT number, so the recoverable VAT is split out.
- When the float runs low or the period ends, open Reconciliation, choose a top-up or a return, and attach the original receipts.
Petty cash format: what goes in each column
A petty cash form records the fund amount, each expense with its receipt and category, the remaining balance and the reimbursement request. The log below follows that format, and the Excel file reconciles cash on hand against receipts.
| Column | What to enter |
|---|---|
| Description | What was paid for and why: "Fuel for the delivery van", not "expense". |
| Category | Transport, hospitality, stationery, repairs, cleaning, courier, government fees, urgent branch purchases. |
| Receipt no. | The number on the attached invoice or receipt. A row without one turns yellow for review. |
| Received | The float the first time, then every top-up you receive from the cashier. |
| Spent | The amount paid including VAT, as shown on the receipt. |
What is petty cash?
Petty cash is company money held by one named custodian to pay for things too small for a purchase order: fuel, refreshments, minor repairs, government fees. It is not an employee advance, which is lent to the employee personally and deducted from salary. The company's policy sets the float amount, the largest single payment allowed, who approves payouts and reconciliations, and how many days the custodian has to settle.
How to reconcile petty cash
- Collect the receipts in date order and check that every row in the log has a receipt number.
- Count the cash and compare it with "Cash left in the float": SAR 2,000.40 in the example.
- If you count SAR 1,990.40, the float is SAR 10.00 short; if you count SAR 2,005.40, it is SAR 5.00 over. Record the difference on its own row with a clear description so the balance matches the cash.
- Post the entry: debit expenses SAR 900.52 and input VAT SAR 99.08, credit petty cash SAR 999.60. On the top-up: debit petty cash, credit cash or bank for the same amount.
Download the log in Excel with the balance and VAT formulas intact, then print the reconciliation as a PDF or edit it in Word before signing.
Petty cash reimbursement form and the imprest system
Under the imprest system the float stays at a fixed amount, and each reimbursement equals what was spent against receipts, so the balance returns to the ceiling. In the office example the reimbursement is SAR 999.60, bringing the float back to SAR 3,000.00. In the "Restaurant branch for a month" example the branch starts with SAR 5,000.00 and receives SAR 2,222.50 mid-month, equal to what it spent in the first half. Choosing "Top up the float" in the Reconciliation tab turns the document into a reimbursement request.
Common petty cash mistakes
- Booking the full amount including VAT to the expense account, so recoverable input VAT is lost.
- Mixing the float with the custodian's own money.
- Reimbursing before the receipts are checked, so undocumented spending piles up.
Accounting and VAT notes for Saudi Arabia
Under the Saudi VAT Law and its Implementing Regulations, input VAT can be deducted only with a tax invoice issued in the company name with its VAT number; a plain cash receipt is not enough. The 15% rate sits in the settings and can be changed, so confirm it with the Zakat, Tax and Customs Authority (ZATCA).
When every branch keeps its own float
At Microtec we build Microtec accounting software, an ERP that brings sales, purchasing, inventory, finance and HR into one place, so branch spending is recorded in the same books the accounts are closed in.
Frequently asked questions
How much should a petty cash float be?
The company sets it in its own policy, usually enough for one or two weeks of office or branch spending. Start with the average you spent in recent weeks and adjust it after the first two reconciliations.
Who is responsible for a petty cash shortage?
The custodian answers for the float, and the company's policy decides how an unexplained shortage is handled. Write the reason in the review notes on the Reconciliation tab so the accountant can accept or reject it.
How do I close a petty cash float?
Settle the last expenses with their receipts, return the remaining cash to the cashier, choose "Return cash and close" in the Reconciliation tab, and have the custodian, accountant and finance sign it.
How do I record VAT on a petty cash expense?
Only from a tax invoice issued in the company name: the VAT goes to the input VAT account and the rest to the expense. Set "Tax invoice?" to Yes and the log splits it; anything else is booked as a full expense.
Does the petty cash reconciliation template work for branches?
Yes. Keep one log per branch float, and the weekly report totals its spending by category and lists the five largest expenses for whoever oversees the branches.