Petty cash might seem small in value, but managing it effectively is a big responsibility. Every business needs someone to oversee this cash, ensure it’s spent correctly and keep accurate records – and that’s exactly the role of a petty cash custodian.
Think of them as the librarian of your cash box: organising, tracking and safeguarding every transaction so your finance team can stay on top of the numbers.
We’ll explain what a petty cash custodian does, their key responsibilities, how to choose the right person for the role and how they work hand-in-hand with your finance team to keep petty cash running smoothly.
Key takeaways:
- A petty cash custodian is responsible for managing and safeguarding petty cash, including approving disbursements and keeping accurate records.
- The role isn’t full-time, but it requires strong organisation, attention to detail and trustworthiness.
- Clear policies and accurate record-keeping are essential to prevent errors, misuse and audit issues.
- Choosing the right custodian means looking for reliable, communicative employees who are comfortable handling money.
- A strong working relationship with the finance team helps ensure petty cash is reconciled correctly and policy changes are enforced smoothly.
What is a petty cash custodian?
The petty cash custodian is the librarian of the petty cash box. Also known as a petty cash manager or keyholder, this person’s responsibilities range from petty cash disbursements approvals, logging the records and overseeing day-to-day management of the petty cash.
Being a petty cash custodian isn’t a full-time role. Often, the custodian is a junior employee who’s been given the opportunity to take on more responsibility, or somebody looking to upskill.
This is because there’s a lot of hard and soft skills required to be a good custodian, including lots of calculations, decision-making, organisation and communication. Skills that are useful for anyone to develop and improve, no matter what direction they take in the future.
The custodian takes ownership of the entire system of petty cash and will work with your finance team to reconcile spending at the end of the month, and determine when changes need to be made.
You might also be interested in: Petty cash: What is it, and how do you manage it?
What are the responsibilities of a petty cash custodian?
Whilst it’s not a full-time gig, the petty cash duties should not be underestimated. It takes somebody who’s well-organised and has a good eye for details. Here are just some of the tasks associated with being a petty cash custodian:
Crediting the petty cash fund
Your custodian will receive a designated amount of money from accounting to be placed into the petty cash pot. Working with an imprest system (which is widely regarded as the best form of petty cash system), the cash box will be filled up to the same total amount at the beginning of each month.
Of course, the key feature here is to make sure that none of the money slips out before it’s locked away in the petty cash box. If cash gets lost between coming out of the main expenses account and going into the petty cash fund, it’s unlikely to ever be found again. Yikes.
Best bet is for your petty cash custodian to simply use a sealed envelope with the top-up amount written on the front. It should then be carried from the accounting department straight to the petty cash box location. Plus, the custodian should count the cash again before placing it into the box to ensure that the amount written was in fact the amount inside the envelope.
Sticking to the petty cash policy
Each policy is different, since they align with your company’s needs. But in general, a petty cash policy details how the money can be spent, on what types of purchases and the maximum amount during a single transaction.
The role of your custodian involves not only abiding by the policy themselves but ensuring that your people also follow the guidelines put in place. The petty cash officer is there to set a good example.
In addition to following protocol when people try to get around the rulebook, in some instances of regular misuse, petty cash custodians will send out company-wide emails referring to the petty cash policy to make their point heard.
Filling out those petty cash vouchers
When an employee requests petty cash, they can’t just take it once approved. Everything must be logged and recorded, to ensure the cash is easy to track. This is also incredibly important for when external parties, such as auditors, go back through the records.
So as part of the role as petty cash custodian, your employee must work with petty cash vouchers. These are the paper records for each and every disbursement coming from the petty cash fund.
Vouchers detail the purchase amount, purpose, who is making the payment and who has approved it; £3 for a pack of post-it notes for Jennie, approved by Carlos.
Once these are filled out by the custodian, they’re placed in the petty cash log book. As a custodian, it’s their job to count out the right amount, and hand it to the right people to make their petty cash purchases.
Logging in the book
The petty cash book is basically the source of all truth for your finance team regarding petty cash. It’s the translation point between a non-financy petty cash custodian and a maths-brained accountant.
It’s up to your petty cash manager to log the spending records correctly, down to the last cent. This means attaching receipts to their associated petty cash vouchers, post-purchase.
Whilst logging a receipt is quite manual, this is one of the best ways for your petty cash custodian to set themselves up for success. This is because, when it comes to the company tax return, receipts are those all-important pieces of the puzzle.
How to choose your petty cash custodian
The petty cash custodian is responsible for safeguarding your company’s cash, enforcing policies and keeping records accurate – so it’s important that they’re equipped to keep petty cash running smoothly and help prevent errors or misuse.
Here’s how to choose the best candidate for your business:
1. Prioritise organisation and attention to detail
Your custodian will log every transaction, fill out vouchers and reconcile the petty cash book. Look for someone who is naturally meticulous, enjoys keeping things in order and can spot discrepancies before they become a problem.
2. Choose someone trustworthy
The role involves handling cash and approving small disbursements. Integrity is essential – the custodian should follow company policies rigorously and act responsibly with funds.
3. Ensure basic numeracy and comfort with money
They don’t need to be an accountant, but your custodian should be confident with basic maths and comfortable counting, tracking and reconciling cash.
4. Look for strong communication skills
A custodian acts as the bridge between employees and the finance team. They need to explain petty cash policies clearly, guide colleagues on proper procedures and escalate issues when needed.
5. Consider availability and reliability
Although it’s usually a part-time responsibility, your custodian should be consistently available during business hours to handle requests, top up the cash fund and maintain records without delays.
6. Think about upskilling potential
A custodian role is a great opportunity to develop organisation, financial awareness and problem-solving skills. Choosing someone eager to learn can add value to both the employee and your business.
7. Start with a trial period
Consider a short probationary period to see how your candidate performs. Monitor their diligence in recording transactions, enforcing policy and collaborating with finance. This ensures a strong fit before the role becomes permanent.
Following these steps helps you select a petty cash custodian who is responsible, reliable and aligned with your company’s processes, making petty cash management smoother and more secure for everyone.
How does a petty cash manager work together with the finance team?
A petty cash custodian doesn’t operate in isolation; their effectiveness depends on a strong, collaborative relationship with the finance or accounting team. They act as the bridge between day-to-day petty cash use and the broader financial oversight of the company.
The custodian may need to:
- Explain spending decisions to the finance team, providing context for unusual or exceptional transactions.
- Clarify record-keeping, including where receipts, vouchers and logs are stored, so accountants can reconcile the fund efficiently.
- Support audits, ensuring all petty cash activity is transparent and easy to trace for internal or external review.
Custodians also play a key role in implementing policy changes. Whilst the finance team sets the rules, the custodian is responsible for communicating them to employees, answering questions and enforcing compliance on the ground. They ensure everyone follows the same procedures, reducing errors and maintaining accountability.
A strong working relationship built on trust and clear communication ensures the petty cash system runs smoothly, keeps records accurate and saves time for both the custodian and the finance team.
Maximum oversight, minimum time spent
There are a lot of responsibilities that come with being a petty cash manager, no matter how much training is offered or how long one’s been in the role.
At Pleo, we aim to streamline the entire process for you, from start to finish. Our petty cash software lets your people snap their receipts straight from the smartphone in their pocket.
Heck! These days, even librarians use technology. Download the petty cash app today.
