Offices and many other work areas need to have some available cash for supplies and food purchases. Rather than using employees’ personal cash, most companies will allow for a small amount of cash to be kept on hand. This is known as petty cash.

There is no strict definition on what amount constitutes petty cash. It depends on the need and the frequency it must be replaced. $100 is a common amount, and anything over $1,000 might be questioned. Why does an office need to have that much cash on hand? It increases the potential for theft, and offers a temptation for employees to avoid normal purchasing procedures.

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