What is petty cash reimbursement, and how’s it done?

No matter the size of your business, you’ll run into small, everyday expenses that don’t quite justify raising a purchase order. That’s where petty cash comes in: a small fund kept on hand to cover things like taxi fares, office supplies or team coffees.

When the cash fund runs low, petty cash reimbursement enters the picture: the process of topping up the petty cash fund after money has been spent, using receipts and vouchers as proof.

At a glance, it’s a simple system. In practice, however, it can be surprisingly messy, involving lost receipts, slow approvals, manual logs and a constant back-and-forth with finance. And in today’s fast-paced business world, this traditional way of managing small expenses is starting to show its age.

In this article, we’ll cover what petty cash reimbursement is, how the manual process works, the problems it creates – and how to be free of them for good.

What is petty cash reimbursement?

Petty cash reimbursement is the process of replenishing the petty cash fund when money is taken out for minor expenses too small to be paid via credit card or bank account.

Say the petty cash jar starts at £100 and an employee takes out £15 for printer paper, the remaining petty cash is £85. The employee submits a receipt for the purchase and the finance team replenishes the petty cash jar with £15, bringing the total back up to £100.

The term ‘petty cash reimbursement’ is also occasionally used about paying back employees for small, out-of-pocket business expenses, such as travel costs, office supplies and similar. This, however, is more commonly referred to as employee reimbursement.

Besides, if the purchase is small enough, the employee may be reimbursed through the petty cash fund – and that brings us back to petty cash reimbursement in the classic sense.

For more on petty cash, check out our article: Petty cash: What is it, and how do you manage it?

Step by step: How to reimburse petty cash

If you’re using a petty cash jar, petty cash reimbursements have to be done manually. This is what the process looks like:

1. Collect receipts and vouchers

First, employees submit receipts for any expenses paid from petty cash, along with completed petty cash vouchers detailing:

• Date of purchase
• Amount spent
• Purpose of the expense
• Employee name

2. Verify transactions

The petty cash custodian – often a receptionist or office manager – checks that each receipt matches its corresponding voucher and that the total of receipts and vouchers equals the cash spent.

3. Count cash on hand

Physically count the remaining cash in the petty cash box to confirm it matches the expected balance based on the transaction records. For example:

• Starting petty cash: £100
• Total of receipts/vouchers: £35
• Cash on hand: £65

4. Complete a petty cash reimbursement form

A reimbursement form is filled out requesting enough funds to restore the petty cash float to its original balance – e.g. £35 like in the example above.

5. Obtain approvals

The reimbursement form and transaction records are reviewed and approved by the relevant manager or finance team member.

6. Replenish the petty cash fund

Finance provides the approved reimbursement amount in cash, which is placed back into the petty cash box.

7. Record the reimbursement in the accounting system

The finance team posts the petty cash reimbursement and associated expenses to the company’s accounting records for tracking and reporting.

8. File all documentation

Finally, receipts, vouchers and reimbursement forms are filed securely for future reference, audits or tax reporting.

And that’s it: the reimbursement is done. As you can see, it’s not the most difficult process – but it’s time-consuming, to say the least.

The problem with petty cash reimbursement

Physical petty cash funds used to be a convenient way to handle small, everyday business expenses. In the modern business environment, however, they often create more problems than they solve.

Here’s why:

• Lack of visibility and control: Petty cash is typically managed locally – like a cash box in a drawer or safe – with limited oversight. Finance teams often have little visibility into who’s spending what, leading to overspending, duplicate or unnecessary purchases and errors and misuse slipping through the cracks.
• Manual, time-consuming processes: Every petty cash transaction requires a petty cash voucher, physical receipts, manual expense logging and reconciliation of the cash fund. It’s a lot of admin for employees and finance teams alike – and it’s inefficient, outdated and error prone.
• Lost receipts and missing cash: Paper receipts are easily lost or forgotten, making it difficult to reconcile transactions or justify expenses later. Similarly, with physical cash on site, you risk cash shortages, theft or misuse and mismanagement of funds.
• Slow reimbursement: When petty cash runs low it must be reimbursed, typically involving counting cash on hand, verifying vouchers and receipts, completing forms and requesting cash top-ups from finance – a process that’s often slow and disruptive.
• Inefficient record keeping: From an accounting perspective, petty cash systems are difficult to track and audit effectively. Missing vouchers, incomplete logs and inconsistent practices across departments or offices can create compliance risks – particularly when claiming tax-deductible expenses.

In short, the manual petty cash reimbursement process is opaque, slow and risky. It wastes valuable time, exposes businesses to financial risk and lacks the transparency modern finance teams need to manage spend effectively.

Luckily, the petty cash reimbursement process doesn’t have to be such a hassle – in fact, it doesn’t have to be a reimbursement process at all. With Pleo, the petty cash box is a thing of the past.

Handle petty cash the modern way with Pleo

Forget about manual reimbursement forms and chasing after receipts. With Pleo’s corporate cards (physical and virtual), employees no longer have to pay out of pocket.

As soon as a purchase is made, the employee gets a notification on their phone via the Pleo app. All they need to do is snap a photo of the receipt and add a quick note (e.g. ‘Team lunch with client), and Pleo automatically matches the receipt and purchase data to the transaction in real time.

No more collecting paper receipts or filling out spreadsheets later – Pleo has you covered.

And if the shop didn’t accept card payments? No sweat. If an employee has to pay out of pocket, all they have to do is submit the receipt via the Pleo app, and Pleo’s Reimbursements will handle it from there.

So even those occasional cash or personal card payments are covered. No physical cash to manage, no manual vouchers, no petty cash reimbursement process – and, most importantly, no more headaches.