Petty cash box usage issues
/What is a Petty Cash Box?
A petty cash box is a receptacle in which petty cash bills, coins, and receipts are stored. It is part of a petty cash system in which small amounts are paid for at the departmental level in cash. Petty cash boxes are commonly used for the following reasons:
They are specifically constructed with different compartments for bills, coins, and receipts.
They usually have built-in locks.
They can be easily stored in a company safe during non-working hours.
They can be easily shifted to a different petty cash custodian, since they are so portable.
They are well-organized for petty cash audits.
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Disadvantages of Petty Cash Boxes
Despite these conveniences, there are several issues with petty cash boxes, which are as follows:
Subject to theft. Being portable, a petty cash box can be easily stolen. This issue can be mitigated by keeping the box in a locked drawer with a contact switch underneath the box. If the box is lifted, the switch is released and triggers an alarm.
Weak lock. The lock on a petty cash box is cheap and easily broken. The only offsetting form of security is to also lock the box within a more robust cabinet, drawer, or safe.
Multiple keys. There is usually a backup key to the lock on the box, which means that there are two keys in the office at any time that can potentially be used to fraudulently open the box. The backup key should be stored in the company safe.
Ease of access. The box is typically unlocked during working hours, so that anyone can easily extract cash from it. A standard policy should ensure that the box is locked when not in use.
How a Petty Cash Box Can Be Improved
In essence, the lightness and portability of a petty cash box create inherent security problems. A good way to mitigate these issues is to enact a company policy to disburse petty cash only under extraordinary circumstances, with all other reimbursements being made through accounts payable checks, or with initial payments being made with company credit cards. Once the volume of petty cash demand has declined, the petty cash box can be permanently stored in the company safe, and only taken out briefly to deal with rare petty cash requests.