April 2020
At one time all businesses maintained a petty cash box – a box of cash available for small purchases. The box was managed by a single individual who reimbursed people for personal purchases on behalf of the company. A receipt was submitted when cash was reimbursed. The maximum amount of cash in the box was restricted to a small amount no more than about $100. The box would be replenished when receipts were submitted for recording.
Condo corporations continue to maintain a similar system when it can make more sense to maintain a corporate credit card.
A corporate credit card offers advantages over a petty cash box. Cash is easy to steal, particularly if stored in an unlocked drawer in an unlocked office periodically unattended. Cash is often provided for small expenditures with an expectation receipts will be provided after purchases. It is not uncommon for receipts to not be provided either intentionally or unintentionally.
Replacing petty cash with a credit or debit card eliminates these risks and provides a third party record of transactions. Less administration is required and there is reduced risk of theft or misuse.
