Get Rid of Petty Cash to Save Time and Money

When I joined a reputed international company in Dubai, they had a petty cash float of AED40,000. I noticed it was mainly used for staff related payments such as advances, salaries and staff expenses. It was also used to pay minor suppliers and the PRO expenses.

Handling petty cash requires lot of time and effort which could otherwise be utilized for productive work. There is also the risk of fraud and theft. Besides there is the cost of insurance for cash in hand.

I discussed this matter with the CEO and we came to the decision to get rid of the petty cash. We did this in the following way:

All staff payments (advances, salaries and expenses) would be by bank transfer

All supplier payments were also by bank transfer or by cheque

PRO expenses for Immigration, Labour etc were by E Dirham card

At the end of one year the company petty cash was zero. Nobody came to me for payments and I had lot of productive time to do my main work which was preparation of the financial statements.

In my opinion petty cash has no place in this digital era. The sooner you get rid of it the better for a company.