What is Petty Cash Replenishment?

Petty cash replenishment occurs when funds are added to a petty cash box. The amount of the replenishment should be sufficient to bring the cash balance of the cash box back up to its designated balance. For example, if the designated balance of a petty cash box is $300 and its current balance is $120, then the replenishment should be for $180.

Replenishment is required periodically, as cash payments from the petty cash box are used to pay for incidental expenses. When there are many payments from petty cash, more replenishments will be required.

A replenishment transaction is initiated by the petty cash custodian, who requests it from the accounting department.