Accounting basics · petty cash book

The petty cash book, explained the simple way.

Small everyday expenses — postage, cartage, conveyance, stationery — deserve their own book, run on a fixed float that's always topped back up. Learn the imprest system and work through a full analytical petty cash book with the numbers tying out to the rupee. Written for B.Com, Class 11–12 and CA Foundation students.

Reviewed July 2026
6 min read
CA Anil Agarwal & the TatvaBooks team

What is a petty cash book?

A petty cash book is a separate cash book kept only for small, day-to-day expenses — postage, cartage, local conveyance, tea and refreshments, stationery, courier charges — the kind of payments that are too minor and too frequent to clutter the main cash book with. It is usually maintained by a junior staff member, often called the petty cashier, working with a small, fixed sum of cash rather than direct access to the business's main cash or bank account.

Its most common form is the analytical petty cash book, which adds one column per expense type (postage, cartage, conveyance, stationery, and so on) so similar payments can be grouped and totalled at a glance — instead of posting every tiny payment to the ledger one at a time.

Petty cash book vs the main cash book

Both are cash books, but they exist for different reasons and are run differently.

	Main cash book	Petty cash book
What it records	All cash and bank transactions of the business, of any size	Only small, everyday expenses — postage, cartage, tea, stationery
Who writes it	The cashier / accountant	A junior employee — the 'petty cashier'
How it's funded	Cash sales, bank withdrawals, receipts from customers	A fixed float given in advance by the main cashier (the imprest)
Entries per period	Every single receipt and payment, individually	Many small payments, grouped into analysis columns by expense type

See the cash book page for how the main cash book itself works, including contra entries between cash and bank.

The imprest system — the rule that makes petty cash work

Almost every business runs petty cash on the imprest system. The idea is simple: give the petty cashier a fixed float, let them spend it on small expenses, and top it back up to exactly the same fixed amount at the end of each period — never more, never less.

Step	What happens
1. Fix the float	The main cashier hands the petty cashier a fixed sum — say ₹2,000 — at the start of the period.
2. Spend & record	The petty cashier pays small expenses through the week, writing each one into the analytical petty cash book under its expense column.
3. Reimburse to restore	At period end, the main cashier reimburses exactly what was spent — so the float is back to ₹2,000 for the next period, every time.

The word "imprest" simply means an advance given for a specific purpose. Because the reimbursement each period always equals what was actually spent, the float itself never grows or shrinks — it's a fixed, self-correcting amount, which makes petty cash easy to control and hard to misstate.

Live worked example — an analytical petty cash book

Meet Sunrise Traders. On 1 September 2026, the main cashier hands the petty cashier an imprest of ₹2,000. Over the week, the petty cashier makes seven small payments, recording each with a voucher number and analysing it into the correct expense column.

Analytical Petty Cash Book of Sunrise Traders — week ended 5 September 2026
Date	Particulars	V.No.	Total ₹	Postage ₹	Cartage ₹	Conveyance ₹	Stationery ₹
1 Sept	To Cash A/c (imprest received)	—	Received ₹2,000
1 Sept	Postage stamps	1	150	150	—	—	—
2 Sept	Auto fare — bank visit	2	180	—	—	180	—
2 Sept	Cartage on goods received	3	220	—	220	—	—
3 Sept	Printing & stationery	4	260	—	—	—	260
4 Sept	Courier charges	5	90	90	—	—	—
4 Sept	Local cartage — office supplies	6	150	—	150	—	—
5 Sept	Photocopy & files	7	80	—	—	—	80
	Total for the week		1,130	240	370	180	340
5 Sept	By Balance c/d	—	870
	Grand total		2,000
6 Sept	To Balance b/d	—	870
6 Sept	To Cash A/c (reimbursement)	—	Received ₹1,130 — restores float to ₹2,000

Check the tie-out: the four analysis columns add up to ₹240 + ₹370 + ₹180 + ₹340 = ₹1,130, which exactly matches the Total column of ₹1,130 — this cross-check is what makes an analytical petty cash book self-verifying. Opening imprest of ₹2,000 less payments of ₹1,130 leaves a closing balance of ₹870 carried down to 6 September. The main cashier then reimburses exactly ₹1,130 — the amount spent, no more, no less — bringing the float straight back to ₹2,000 to start the next week.

At month end, only the column totals get posted to the ledger — Postage A/c is debited ₹240, Cartage A/c debited ₹370, Conveyance A/c debited ₹180, Stationery A/c debited ₹340 — instead of eight separate small postings. See how individual postings work on the ledger page.

Common mistakes & student tips

Reimbursing the wrong amount. Under the imprest system, the reimbursement must equal exactly what was spent (₹1,130 here) — never a round number, never the closing balance. Reimbursing anything else breaks the fixed-float principle.
Forgetting the Total column must equal the sum of analysis columns. This is the built-in check of an analytical petty cash book — if they don't match, an entry has been posted to the wrong column or added up wrong.
Posting every single payment to the ledger. Only the column totals are posted periodically, not each individual voucher — that's the entire point of grouping expenses into columns.
Missing voucher numbers. Every petty cash payment should have a signed voucher (or a bill/receipt) as proof — without it, the petty cashier has no evidence to support the expense claimed.
Confusing petty cash with the main cash balance. Petty cash is a small, ring-fenced float for minor expenses only — large payments (rent, salaries, supplier bills) always go through the main cash book or bank, never through petty cash.

In TatvaBooks, this happens automatically

Writing up a petty cash book by hand teaches the discipline behind the imprest system — every rupee spent, every voucher tracked, every reimbursement matching exactly. But in a real business, chasing paper vouchers and manually totalling columns each week wastes time better spent elsewhere. In TatvaBooks, petty expenses are recorded against the right expense head the moment they happen, running balances update instantly, and the reimbursement amount due is always just one click away — no separate column totals to add up by hand.

It's built by Chartered Accountants for Indian businesses, and it's free to start on the Solo plan. See how expense tracking stays effortless on our cloud accounting software and features pages.

Frequently asked questions

What is a petty cash book?

A petty cash book is a separate cash book kept for small, everyday expenses — postage, cartage, conveyance, refreshments, stationery — so the main cash book isn't cluttered with dozens of tiny entries. It is usually maintained by a junior employee (the petty cashier) and, in its most common analytical form, has separate columns for each type of expense so similar payments can be totalled at a glance.

What is the imprest system of petty cash?

The imprest system is the standard way to run petty cash: the main cashier gives the petty cashier a fixed sum (the 'imprest' or 'float') at the start of a period, say ₹2,000. The petty cashier spends from it through the period and records every payment. At the end, the main cashier reimburses exactly the amount spent — never more, never less — so the float is restored to the same fixed ₹2,000 for the next period. This makes petty cash self-checking: the amount reimbursed should always equal the total column, which should always equal the sum of the analysis columns.

Why does a petty cash book have analysis columns?

Analysis (or analytical) columns group similar expenses together — one column for postage, one for cartage, one for conveyance, one for stationery, and so on. Instead of posting seven separate small entries to seven ledger accounts, the petty cashier posts one total per column to the ledger periodically (say, monthly). It saves posting effort and gives an instant read on where the small cash is going.

Is petty cash the same as cash-in-hand?

No. Cash-in-hand (recorded in the main cash book) is the business's general cash balance — from cash sales, cash collected from customers, and so on — used for transactions of any size. Petty cash is a small, ring-fenced float set aside only for minor, day-to-day expenses, kept separately so the main cash book stays focused on significant transactions.

How is the closing balance of a petty cash book calculated?

Closing balance = Opening balance (imprest) − Total payments for the period. For example, with a ₹2,000 imprest and ₹930 spent in the week, the closing balance carried down is ₹1,070. When the main cashier reimburses ₹930 at period end, the float is restored to ₹2,000 to start the next period — that reimbursement amount always exactly equals what was spent, by design of the imprest system.

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