Petty cash simply means the cash in hand, the companies always issue a small amount to money to the institutes or departments in order to deal with any kind of uncertain contingency or any kind of sudden expense that can occur during a financial year or month.
The maintenance of petty cash is the responsibility of the cashier or the accountant in the absence of the cashier working within the department, or the person who is responsible for the maintenance of petty cash their job position varies according to the type of organization.
The petty cash is used for the minor expenses such as purchase of postal stamps which can be used for the courier or treasury use, or sometimes the clients or guest are hospitalized with food and cold-drinks the expenses for such events are not beard by the company personnel but company itself pays for the such expenses.
The appropriate use of petty cash funds are necessary for such purpose the petty cash reconciliation process is carried out by the company in order to make sure that the funds are used wisely and appropriate, it is process of verifying the petty cash transaction.
The verification of the petty cash is processed as first of all the counting of the amount which is saved and locked in the locker is counted by the personnel meaning the ending balance of the cash and it is compared with the beginning balance, the difference between beginning and ending balance is an expense which is carried out by the department.
Now the verification of such expenses can be seen and verified with the receipts provided by the department personnel, if after matching the beginning, ending and difference balance is equal then it is to be said that the funds are utilized wisely and appropriately.
But once the beginning balance does not meet with the ending and difference balance there must be something fishy that is done by the institute personnel, or sometimes it requires more investigation.
The employee who is responsible for the handling of the petty cash, if there is inappropriate usage or the balances are not equal is asked to provide the missing receipts or track down the transactions which are undocumented by following such methods things will become much clear.
It is not certain for all time that if the balances are not equal that there is any embezzlement or blunder done by the employees, sometimes any unpleasant event occurs that destroys the recodes such as flood, short circuit, or any other natural disaster.