In short: Petty cash covers small everyday expenses a shop pays in cash, such as cleaning, transport or hospitality, each recorded with its reason.
The full guide: Daily cash control
Work it out now: Cash count
Petty cash is the small amounts a shop pays in cash during the day for things that cannot wait: bags, cleaning supplies, tea and coffee for visitors, a taxi to fetch a missing delivery, or a small repair. Each one is minor, but over a month they can add up to a noticeable sum. That is why they are treated as their own line in the books, often with a separate fund or limit.
In many shops these expenses come straight out of the cashier's drawer. If they are not recorded in the software, they show up at closing as a cash shortage. The cleaner way is for the cashier to record the expense in the software when paying it, with the amount and reason, and to keep the paper receipt if there is one. Some shops set a fixed petty cash amount each week and top it up.
Petty cash, fixed costs and stock purchases
| Type | Examples | Where it is recorded |
|---|---|---|
| Petty cash | Bags, cleaning, hospitality, a small delivery charge | An expense from the till when paid |
| Fixed costs | Rent, salaries, electricity | The shop's monthly expenses |
| Stock purchases | A carton from a supplier | Stock received on the supplier's account, not an expense |
How to keep petty cash under control
Make sure every expense has a clear reason, and set a limit on what staff can spend without asking. Review expenses monthly by type; you may find that bags alone eat into your margin. For how they are treated for tax, check with your accountant.
In Ghalleh the cashier records the expense from the till screen, so it comes off the expected cash, never shows as a shortage at closing, and lands in the profit report.
A shop example
A perfume shop in Jabal Amman spends JOD 3.500 on bags in a week, JOD 2.000 on taxis to fetch empty bottles, and JOD 1.250 on coffee for customers. That is JOD 6.750 in total, all recorded in the software, so no shift shows a shortage at closing.
Common questions
What is the difference between petty cash and fixed expenses?
Fixed expenses such as rent and salaries repeat at known amounts. Petty cash expenses are small, variable and paid in cash as needed.
Do I need a receipt for every petty cash expense?
Keep one whenever you can, since it helps your accountant. If there is none, at least record the amount, reason and date in the software.