What a brokerage's petty cash should and shouldn't pay
What an insurance brokerage should let petty cash pay for, and which costs belong on a supplier bill or a staff expense claim instead.
By Achekam · · 4 min read · For Insurance businesses in South Africa, Nigeria, Kenya
The petty cash tin in a brokerage starts innocently: milk for the kitchen, a courier for a signed proposal form, parking for a client visit. A year later it is paying the cleaner's monthly fee, reimbursing an account executive's fuel, and covering a printer cartridge order that should have gone through the stationery supplier's account. The slips are a mess, the balance never quite agrees, and nobody can say where the line is.
The line needs drawing on paper. This piece sets out what petty cash is for, what a brokerage should allow it to pay, and which costs belong on a supplier bill or a staff expense claim instead.
What petty cash is for
Investopedia defines petty cash as a small amount of money a business sets aside for minor, immediate expenses where using cheques or cards would be impractical. AccountingTools states that petty cash should be disbursed only for minor business expenses, and that the fund should be locked at all times when it is not in use.
Two words in those definitions do most of the work: minor and immediate. A cost that is large, or that could wait for a proper invoice, is not a petty cash cost, however convenient the tin is.
Sizing the float and naming who approves
Investopedia, writing for an American audience, notes that many companies keep between $100 and $500 as a petty cash fund. That is not a figure to copy in rand, naira or shillings. It is a reminder that the fund should be small: enough for the minor costs of a typical period, and no more. Look at what genuinely went through petty cash over the last few months, take out what should not have, and size the float on what is left.
Investopedia also explains that a petty cash custodian is appointed to enforce the fund's rules, request replenishments and dispense funds, and that usually only a few people may approve disbursements. In a brokerage, that might be the office manager as custodian, with the principal or a director as the only other approver. The custodian should not approve payments to themselves. Top the fund up only against slips: the slips plus the cash left in the tin should always add up to the float, and any gap is explained before more money goes in.
Costs that belong on a supplier bill
Anything a supplier will invoice you for should be recorded as a supplier bill, not paid from the tin and reclaimed. In Achekam, each supplier bill is captured line by line with its VAT; a bill with no purchase order behind it is held for approval before it posts, and it can then be paid all at once or in instalments from the bank account you pick. That route gives you a proper tax invoice, an approval and a payment from the bank, all of which petty cash lacks.
Typical brokerage costs that belong here:
- cleaning and office services;
- stationery and printer supplies ordered from a regular supplier;
- IT support and software;
- couriers on an account;
- refreshments delivered by a regular supplier.
The same principle that keeps a restaurant's suppliers on bills, described in paying food and beverage suppliers in parts, applies to an office.
Staff costs through expense claims
Costs that staff pay out of their own pockets, such as fuel for client visits, parking, a client lunch or a professional exam fee, are better handled as expense claims than as petty cash.
In Achekam, a staff member whose login is linked to their payroll record can submit expense claims for payroll to decide, alongside downloading payslips and applying for leave. An approved claim is repaid on the next pay run. That gives each claim an approver and a record, and it takes the cash out of the office altogether. Expense claims through self-service shows how a consulting firm runs the same process.
Recording what petty cash does pay
Achekam has no separate petty cash book. The slips for what petty cash legitimately pays can go through Financial Intake: supplier invoices and receipts uploaded there become suggested postings, and while AI can suggest how to post them, only a person approves and posts. Upload each slip with a note of what it was for, and approve the postings when the fund is topped up.
Keep the fund itself tightly controlled. Counting it by surprise, and the duties of the custodian, are covered in petty cash duties and surprise counts.
A short allowed and banned list
Pin a list like this inside the tin's lid.
Allowed:
- milk, tea, coffee and small kitchen items bought locally;
- a one-off courier or postage when no account courier is available;
- parking or a taxi fare on an urgent errand, with a receipt;
- small, urgent office items, such as batteries or a replacement plug.
Not allowed:
- anything with a supplier invoice, which goes on a supplier bill;
- staff fuel, meals and travel, which go on an expense claim;
- salaries, wages, advances or loans to staff;
- personal purchases, even "temporarily";
- client money, premiums or refunds, which never go near petty cash.
The last item matters particularly in a brokerage. Money that belongs to clients or insurers must never mix with office cash.
AccountingTools' petty cash procedure sets out how to run and replenish the fund against vouchers.
Write your allowed and banned list this week, move the costs that should be on bills or claims to those routes, and resize the float to what remains. The tin will be lighter, and the slips will finally add up.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
