Petty cash book is small book that keeps records of all the small transaction occurs in the organization. Small transactions such as tea/coffee expenses, taxi fare, stationary, water expenses etc.  Petty cash fund effectively manages the small transactions. Petty cash book is maintained by the petty cashier.

Types

1. On the basis of imprest
   • Imprest petty cash fund
   • Non-imprest petty cash fund
2. On the basis of expense record
   • Simple petty cash fund
   • Analytical cash fund

Large organizations with large petty transaction usually maintain separate petty cash book in order to effectively manage the petty cash funds. Following points highlights the importance of petty cash book.

1. It maintains the petty transaction payment systematically.
2. It supplies information regarding petty payments  easily and quickly.
3. Helps to control the petty expenses by comparing the petty expenses of two different period of time.
4. Reduces the burden of petty transaction for head cashiers.
5. Saves time because each payment made under the particular head is not posted into the ledger separately.

                                                                         Specimen of Petty Cash Book