Most small businesses keep a bit of cash on hand — for stamps, parking, cleaning supplies, the odd emergency purchase. Done casually, petty cash becomes a leak SARS can't verify and your books can't explain. Done properly, it takes ten minutes a month.
Use the imprest (float) method
Decide on a fixed float — say R1,000. Draw it once, and from then on you only ever top the float back up to R1,000. The top-up amount always equals the slips in the box, which is what makes the system self-checking.
The three rules
1. No slip, no spend. Every cent leaving the tin has a till slip or a signed voucher. 2. One person is responsible. Shared tins go missing; owned tins balance. 3. Count it monthly. Cash + slips must equal the float. A shortage gets recorded, not ignored.
Recording it in your books
Petty cash is just another asset account, like a tiny bank account:
- Starting/top-up: move money from Bank to Petty Cash (you'll see the ATM withdrawal on your bank statement — allocate it to Petty Cash, not to an expense).
- Spending: record each slip as an expense paid from Petty Cash — stationery, fuel, refreshments, whatever it actually was.
- Shortage at count: record the difference as a small expense so the account matches reality.
Don't lose the VAT
If you're VAT-registered, cash slips carry claimable input VAT — but only if you keep the slip (and for purchases over R50, a slip that qualifies as a tax invoice). A photo of the slip attached to the expense entry is the easiest way to keep the proof SARS expects.
Common mistakes
- Allocating the ATM withdrawal itself as "expenses" (it's a transfer to petty cash, not an expense)
- Paying personal spending from the tin ("I'll put it back")
- Letting the float grow — a big tin is a temptation, keep it small
- No slips → no VAT claim → no deduction if SARS queries it
Doing it in 360books
In 360books, add a Petty Cash account to your chart of accounts, snap each slip with AI receipt capture (it reads the amount and VAT for you), and reconcile the tin like a mini bank account. Your petty cash stops being a mystery line and becomes provable, deductible spend.