Petty cash reconciliation: balance the float and receipts

The tin has $116 in it, the receipts add up to $154 and the float is supposed to be $300. There is a $30 question to answer. Putting in another $184 might restore the cash, but it won't explain where that $30 went.

An imprest system uses an agreed float and replenishes supported spending to restore it. You can also operate a changing cash balance, but then the worksheet must include every top-up, withdrawal and purchase since the last count.

Choose a cut-off and count the actual money

Pause spending while you count. Write down the date, time, custodian and opening agreed float. Count notes and coins by denomination. If possible, have a second person check the count; if you're the only person in the business, record it carefully and keep the supporting documents together.

Separate cash from receipts, personal IOUs and cards. A note saying “borrowed $20” is not $20 in cash and doesn't establish a deductible business purchase.

Complete the float worksheet

This fictional $300 float had no top-ups since the previous count. Four supported business purchases total $154. A further $30 withdrawal is reported by the custodian, but its receipt is missing.

Worksheet line	Amount	Supporting detail
Agreed opening float	$300	Previous signed count.
Cash counted	$116	2 × $50, 1 × $10, 1 × $5, 1 × $1.
Supported purchases	$154	Receipts: $44 + $33 + $55 + $22.
Unexplained or unsupported difference	$30	$300 − $116 − $154. Custodian to obtain evidence.
Control equation	$116 + $154 + $30 = $300	The equation balances; the $30 exception is not resolved.

If you replenish only the $154 supported spending: cash becomes $270 and the $30 exception remains. If the missing $30 is later supported and approved, a further $30 top-up restores $300. Record both top-ups as transfers.

Original ASBG printable worksheet. Amounts are gross; tax treatment must follow each purchase's evidence. Print this page or copy the rows into your own count sheet.

The physical count is $116 whether the software says $116, $146 or $300. Don't change the count to match an expected number. Correct the accounting records only after the evidence explains the difference.

Record purchases and replenishment separately

Each supported receipt records what the cash bought. Check for a purchase already entered through an expense claim or supplier bill before adding it again. Attach the receipt and record its purpose.

The cash withdrawn from the bank to replenish the float moves money between two business cash accounts. MYOB's petty cash guidance treats petty cash as an account that receives funds, pays expenses and is topped up from another bank account. Use the current workflow for your version.

Record the top-up in both the bank and petty cash records, with one reference. Don't code the ATM withdrawal as “office supplies” if the receipts have already recorded those supplies. The internal transfer guide explains the same principle for bank accounts.

Investigate a missing receipt or cash shortage

Ask who took the money, when, what they bought and whether change was returned. Request a replacement receipt from the supplier. Check whether the item was paid by card after all, or whether the cash was returned after the cut-off.

Until the $30 is explained, retain it in the reconciliation's exception record and agree any temporary ledger treatment with the bookkeeper. Don't claim unsupported goods and services tax (GST), invent a receipt or add the amount to a nearby valid purchase.

If evidence can't be recovered, the responsible person must decide the accounting and tax treatment with appropriate advice. An authorised loss entry, a repayment by someone who borrowed the cash and a substantiated purchase are different outcomes. Record the actual one.

Make next month's count easier

Give every voucher a number, attach its receipt and record the person receiving cash. Keep change with the voucher until the transaction is checked. Use the same closing date as the surrounding bookkeeping routine, and retain the count and top-up evidence under your record-keeping process.

Key takeaways

• Cash plus supported spending should explain the agreed float.
• A balancing equation can still contain an unresolved shortage.
• Replenishment doesn't create another expense or GST claim.

Where to get help

Use MYOB's current petty cash instructions linked above. Give your bookkeeper the count sheet and unresolved vouchers, or choose another record check in bookkeeping and BAS.