How to Manage Petty Cash: A SAR 500 Float System You Can Set Up Today

Salem, who works at a tailoring shop, heads out to buy a SAR 15 carton of water, comes back an hour later because the cleaning supplies ran out, and by the end of the week nobody knows where SAR 300 went. The fix is a fixed petty cash float: a set amount, such as SAR 500, handed to one person, paid out only against a voucher for every purchase, then counted each week and topped back up to 500 by exactly the total of the vouchers.

Accountants call this the imprest system. The approved balance of the fund never changes; what changes is how it splits between cash in the box and payment vouchers. At any moment, cash plus vouchers must equal 500, and that one equation catches most leaks on its own.

Setting up the float today

Seven steps you can put in place before closing time:

1. Choose a fixed amount that covers a week of small spending with some margin; if you usually spend SAR 200 to 300 a week, 500 works.
2. Appoint one custodian, here Salem, who is the only person who opens the box and pays from it.
3. Hand over the money against a receipt he signs, and keep the cash in a locked box completely separate from the sales drawer.
4. Prepare numbered payment vouchers, each showing the date, amount, purpose and Salem's signature, with the store receipt attached when there is one.
5. Set a limit per payment, such as SAR 100; anything above it needs your approval and is paid from the bank or the main till.
6. Define what the fund may buy: water and refreshments, cleaning supplies, delivery runs, and small urgent supplies like thread and buttons.
7. Count the fund with Salem every Thursday, then replenish it with the total of approved vouchers only.

In the books, setting up the fund is recorded as: petty cash debit 500, bank credit 500. Money moved from one asset to another; nothing has been spent yet. OpenStax's section on petty cash funds covers the entries for setting up, replenishing and handling differences.

Week one: vouchers, then the count, then the top-up

On Thursday afternoon the owner counted the box with Salem: 275 in cash and 225 in vouchers, a total of 500 with no difference. The top-up equals the vouchers exactly, 225, bringing the cash back to 500.

The replenishment entry spreads the vouchers across expense types, and the credit goes to wherever the top-up money came from:

• Refreshments and water expense: debit 84, which is 30 + 54.
• Cleaning expense: debit 46.
• Transport and delivery expense: debit 25.
• Operating supplies: debit 70, which is 38 + 32.
• Bank: credit 225.

The petty cash account itself did not move; it stays at 500 in the books. Expenses are recorded at replenishment, so top up before the month closes so each month's expenses land in that month.

The rest of the month: a week that comes up 15 short

Vouchers for the month total 997 and top-ups total 1,012; the 15 between them is the shortage itself.

In week three, the expected cash was 500 − 268 = 232, but the count came to 217. Before recording anything, count again and ask Salem about any delivery run he paid for and forgot to document. If no cause turns up, record the difference in a separate cash over and short account:

• The week's expenses by type: debit 268.
• Cash over and short: debit 15.
• Bank: credit 283.

The 283 is what brings the cash from 217 back to 500. Write the date, the difference and both your signatures on the count sheet. A small one-off difference does not mean theft; a repeated one means weak control. Agree in writing, in advance, on how repeated shortages will be handled, and check your country's labor rules before deducting anything from wages. For tracing differences, see the shop cash close example with a 20 difference.

What if you find 15 extra?

Don't leave it in the box and don't pocket it. An overage usually means a voucher was written for more than was paid, or sales money ended up in the wrong box, such as a customer's deposit for a tailoring order. If you can't find the cause, credit it to cash over and short and top up by the vouchers total minus 15. So if vouchers total 194 and the cash counted is 321, the top-up is only 179.

Rules that stop leaks

• No IOUs in the box: a note saying “took 50, will return it” is neither a voucher nor cash.
• No personal loans from the fund, not for the employee and not for the owner.
• No mixing with the sales drawer: no sales money or deposits go into the fund, and no petty expenses are paid from the drawer.
• Cross out or stamp every voucher “replenished” after the top-up so it can't be reimbursed twice.
• A surprise count by the owner once a month, on top of the weekly count.
• If the fund regularly runs out before Thursday, raise the fixed amount by a clear decision instead of borrowing from the drawer.

Raising the fund from 500 to 700, for example, is recorded as petty cash debit 200, bank credit 200. The owner's personal needs have their own path, recorded under the owner's name, as in owner drawings from the shop. OpenStax's section on internal controls explains how clear responsibilities and documentation protect assets, and you can see the logic of keeping each cashbox and currency separate in another example.

Salem's float as its own treasury account in Zawid Accounts

Create a separate cash treasury account in Zawid Accounts with a clear name such as “Shop petty cash – Salem” in Saudi riyals, as shown in the guide to keeping cash and other treasury accounts separate. Move 500 into it from the bank or the main till using a transfer between treasury accounts, since a transfer is neither new income nor an expense.

Record each voucher as an expense paid from that petty cash account, with the voucher number and item in the description, such as “Voucher 104: thread and buttons,” as the guide to recording an expense clearly explains. The account balance in the app then equals the cash you should find in the box, so you can compare your count with it directly. At top-up time, transfer the amount from the bank to the petty cash account to bring it back to 500. Here each expense is recorded when it is paid rather than at replenishment, and the result is the same.

If a shortage appears and you can't find the cause, record it as an expense from the petty cash account with a description like “Week 3 count shortage” rather than editing another voucher to hide it. The app does not post double-entry journal entries; the entries above explain the accounting logic, and what you record in the app are the actual transactions with clear notes.