Petty Cash Reconciliation Checklist Template

The custodian starts the run about two working weeks before the period ends. The answers on the first task assign every task, set each due date from the count date and add the tasks this period needs.

• Record the float, the period and who does what — the float and where it is kept, the period and its count date, the imprest amount, the tolerance, the custodian, the independent counter, the approver and the bookkeeper, which tax record rules apply, and whether the float or its custodian is changing
• Check last period’s reconciliation was closed — last period’s reconciliation approved, its top-up counted into the float and the petty cash balance in the ledger equal to the imprest amount, so this period starts from a known figure
• Confirm the petty cash rules for this float — the most that can be paid in one payment, what petty cash may and may not be used for, who can authorise a payment and how a cash advance is handled, taken from your own petty cash policy

Someone other than the custodian counts the float during the period, on a day of their choosing up to the due date. The due date is the latest day for it; an earlier, unannounced day tests the float better. Where your policy asks for a surprise count, the custodian is not told the day in advance. Cash plus paid vouchers should equal the imprest amount on any day, so this count stands on its own.

• Count the float without notice, with the custodian present — the cash counted by note and coin by the independent counter, with the custodian watching and the box never left with one person while it is open
• Total the vouchers and receipts in the box — every paid voucher and receipt in the box added up, with any signed slip for a cash advance totalled separately
• Check cash plus vouchers equals the imprest amount — the cash counted plus the vouchers and any advances set against the imprest amount, with the difference over or short written down
• Check a sample of vouchers against their receipts — a few vouchers picked at random, each checked for a receipt for the same amount, an authorising signature, an amount within the limit and a business purpose
• Report the count to the approver — the count sheet signed by the independent counter and the custodian, and the difference and anything found in the sample sent to the approver

The custodian counts the float on the count date, after the last payment of the period. The cash, the paid vouchers and any advances still out should add up to the imprest amount.

• Stop payments and count the cash by note and coin — no more payments from the box once the count starts, then every note and coin counted and entered by denomination
• Collect and total the paid vouchers — every petty cash voucher for the period taken out of the box, put in date order and added up
• Record any cash advances still out — any cash handed out against a signed slip for a purchase not yet made, with who has it, how much and when the receipt and change are due back
• Add the count up against the imprest amount — cash counted plus vouchers plus advances, set against the imprest amount before any voucher is checked

Every payment needs a voucher, a receipt and an authorisation. A payment with no receipt adds a task, and for a UK VAT-registered business another task records the VAT on valid VAT receipts.

• List every voucher for the period — each voucher numbered in sequence with its date, who was paid, what for and the amount, so a missing or repeated number shows
• Match each voucher to its receipt — each voucher matched to a till receipt or invoice for the same amount, with the receipt attached to the voucher
• Missing receipt: record the payment and get it approved — a signed note from the person who spent the money saying what was bought, when, from whom and for how much, approved by the approver before the payment is accepted
• Check each payment is within the petty cash rules — each payment under the single payment limit, for something petty cash may be used for, authorised by someone allowed to, and not split into smaller payments to get under the limit
• Code each voucher and total by expense account — each voucher given the expense account or cost centre it belongs to, such as postage, travel, refreshments or office supplies, and the vouchers added up by account
• VAT: record the VAT on each valid VAT receipt — the VAT on each receipt that is a valid VAT invoice recorded apart from the net cost, and no VAT claimed on a receipt that is not one
• Check the coded total equals the vouchers total — the totals by expense account added up and checked against the vouchers total from the count, so nothing is left uncoded or counted twice

Set the count against the imprest amount. A difference over the tolerance adds three tasks: recount, trace the cause and record the explanation for the approver.

• Work out the difference, over or short — the imprest amount less the cash, the vouchers and any advances; short means less than the float should hold, over means more
• Over tolerance: recount the cash and re-add the vouchers — the cash counted again by a second person and the vouchers added up again, because a counting or adding error is the first thing to rule out
• Over tolerance: trace the cause — the voucher list checked for a missing or repeated voucher, change not returned from a purchase, a payment made without a voucher, an advance not recorded, or last period’s top-up drawn for the wrong amount
• Over tolerance: record the explanation for the approver — the amount, the likely cause, who had access to the box and what happens next, written as fact; nobody is accused without evidence
• Record how any difference will be posted — any difference that is left, within the tolerance or explained, written down with the account it will be posted to, such as cash over and short, so the float can be topped up to the full imprest amount

The custodian puts the reconciliation and the top-up request together, and the approver checks them against the vouchers and receipts. The approval is the gate: the top-up and posting tasks cannot be completed until it is done.

• Prepare the reconciliation and the top-up request — one sheet with the imprest amount, the cash counted, the vouchers by expense account, any advances, the difference and the top-up asked for, which is the vouchers total plus any shortage or less any overage, signed by the custodian
• Approver checks the reconciliation against the vouchers — the count, the vouchers, the receipts and the arithmetic checked, any payment outside the rules questioned, and anything that does not add up sent back to the custodian
• Approve the reconciliation and the top-up — the reconciliation, any difference and the top-up amount approved by someone other than the custodian; if it is not ready, leave this task open, because the top-up and posting tasks cannot be completed until it is done
• Not approved: put right what the approver raised — each point the approver raised answered or corrected, the reconciliation sheet updated and sent back, and no top-up drawn until the approver has approved it

The bookkeeper draws the approved top-up and posts the period’s vouchers. In an imprest system the top-up brings the cash back to the fixed amount, so the petty cash balance in the ledger stays at the imprest amount.

• Draw the approved top-up — the approved amount drawn from the bank by cheque, transfer or cash withdrawal for petty cash, with the bank reference recorded
• Count the top-up into the float and sign for it — the top-up counted in front of a second person and put in the box, so the cash now equals the imprest amount, less any advances still out
• Post the vouchers to their expense accounts — one entry for the period: each expense account debited with its total, the VAT to its own account where it can be reclaimed, and the bank credited with the top-up
• Post any difference to cash over and short — a shortage or overage left after the investigation posted to its own account, such as cash over and short, with the approver’s decision as the authority, and never hidden in an expense account
• Check the petty cash ledger balance equals the imprest amount — the petty cash account in the ledger checked after posting; it should equal the imprest amount, and a gap means a posting is missing or wrong
• File the reconciliation, vouchers and receipts — the signed reconciliation, the vouchers with their receipts, the count sheets and the approval kept together for the period, for as long as your tax rules require

Applies only when the first task says the imprest amount or the custodian is changing. A new amount is agreed with the approver and posted, and a new custodian takes over only after a joint count.

• Float change: agree the new imprest amount — the new fixed amount agreed by the approver, sized to the payments the float makes between top-ups, with the reason recorded
• Float change: adjust the float and post the change — an increase drawn from the bank and put in the box, or a decrease counted out and paid back into the bank, posted to the petty cash account so its balance equals the new imprest amount
• New custodian: count the float with both custodians present — the outgoing and incoming custodians count the cash and the vouchers together, check they equal the imprest amount and both sign the count before the box changes hands
• New custodian: hand over the box, keys and records — the box, every key, a new safe code where there is one, the voucher pad and the period’s records handed to the incoming custodian, with the date recorded
• New custodian: update who is authorised to hold the float — the custodian’s name changed in the petty cash policy, the list of who may authorise payments and the bank mandate for drawing top-ups, so the next run names the new custodian

Close the run once the float is back to its imprest amount and the records are filed, and note anything the next period should know.

• Review how the float was used this period — the payments by expense account compared with earlier periods, any payment that should have gone through purchasing or expense claims instead, and whether the float is too large or too small
• Note anything for the next period — advances still out, receipts promised, a change to the rules or a float that ran short before the period ended, written where the next run will see it
• Approver confirms the period is closed — the approver confirms the float is back to its imprest amount, the entries are posted and the records are filed, which closes the period